CHAPTER 24Code Blue Health Science Edition 4

Western Civilization prides itself on having constructed a free society.

Basic freedoms include the right to: Independent thought Free speech Freedom of religion Freedom to travel Freedom to start and

conduct business

Freedom is the right to be wrong, not the right to do wrong. --John George Diefenbaker, 13th Prime Minister of Canada

Free societies are based on honesty and trust

This is especially true in the area of business, but it is also true in the area of healthcare.

Fraud is deception intended to result in financial or personal gain.

Contracts could not be written because society as a whole didn’t keep promises

Checks could not be written because people as a whole would write them with no money in the bank

Credit cards could not be issued because people as whole would not pay make their credit card payments

Banks could not loan money because society as a whole refused to make their payments

Couldn’t trust that their physicians and nurses hadn’t cheated in school

Couldn’t trust doctors to know and choose the best treatments

Couldn’t trust hospital nurses not to steal their pain medications

Couldn’t trust nurses and other healthcare professionals to report professional misconduct or observed errors in medication or treatment

Couldn’t trust licensure organizations to weed out bad professionals

REVOKED

Is a major problem in both business and healthcare

Costs patients, employers and employees billions of dollars

Erodes the trust that is essential to a free society

EmbezzlementStealing trade secretsOverbillingFalsification of recordsDeceptive advertisingProduction of shoddy productsAnd thousands of other practices

that most people recognize as dishonest

Performing unnecessary services solely for the purpose of billing insurance or patients

Billing for unnecessary excessive services

Billing for more expensive products and services than were provided

Billing for products and services that were not provided

Billing for the same products and services twice

Inflating the diagnosis under DRG reimbursement to increase payment

Certifying that treatments that are not covered by insurance plans are medically necessary when they are not

Providing a false diagnosis to justify tests, procedures, products or surgeries that are not necessary

Accepting kickbacks for patient referrals

Waiving patient co-pays or deductibles and over-billing the insurance carrier or benefit plan

Stealing hospital propertyFalsifying pay card dataStealing drugsFalsifying medical recordsAnd so on

Investigators have shown the following conditions are needed: A financial need on the part of the

employee (it could also be a drug need for an addicted employee)

An opportunity due to poor controls A low probability of being caught

It was owed to me i.e. “I am not paid enough”

Everyone else is doing it It won’t be missed I will pay it back later

Vary rarely does one go from being a totally honest person to a “crook” in one step.

Usually it is a slow, incremental process.

Studies show that people get involved in fraud one step at a time.

Having taken the first step It is easy to rationalize the

second step It is sometimes necessary to take the

second step to cover the first

People will sometimes do things as a part of a group that they would never do individually.

This is known as the “mob mentality.”

Investigators who have researched large corporate fraud have often found that those involved did it out of a senses of false loyalty to the boss or to the organization.

We love people, but we are loyal to principles.

When an employer hires you, he or she buys your talent, time, and best efforts.

During the years that the author was a hospital administrator, he was surprised many times by the lack of integrity showed by business organizations, healthcare organizations, and employees.

Make a decision early in your career to be honest.

Draw a line, so to speak, as to what you will never do and then never cross it.

Wes Douglas is discovering various instances of dishonesty and fraud in his hospital.

The best way to correct this in the future will be to: Establish clear cut policies on employee

behavior. Establish controls to prevent employees from

stealing hospital assets. Establish a good audit program to see that

policies and controls are working.