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Dynamic Chiropractic – August 14, 1992, Vol. 10, Issue 17

Health Fraud Enforcement: New Emphasis from State and Federal Authorities

By James Harrison
Law enforcement agencies at both the state and federal levels are giving health fraud enforcement an unprecedented amount of attention in 1992. As public spending on health care services continues to skyrocket, officials are looking to reduce fraud, waste, and abuse as a means of controlling spending. The results have been spectacular: On June 27, FBI agents arrested more than 100 persons, including 82 pharmacists, on charges of false billings and illegal diversion of prescription drugs. According to FBI Director William Sessions, the arrests were the product of the FBI's largest undercover probe of health care fraud to date. The director also indicated that this was just one of an expanding body of such investigations the bureau had under way.

In January 1992, California law enforcement officials, acting under the direction of the state attorney general, arrested nearly two dozen attorneys and doctors, including two chiropractors, in a massive insurance fraud investigation. In Massachusetts, law enforcement officials have conducted at least one major "sting" operation aimed at health fraud so far this year, and other states are following suit.

These state-run investigations have been sophisticated operations involving dozens of agents and attorneys who often pose as auto accident victims or workers' compensation patients in an attempt to uncover illegal behavior on the part of health care practitioners. Doctors who hint at splitting insurance or damage payments or inflating charges are led along, implicating themselves in fraudulent activities, and then arrested, along with any cooperating colleagues, attorneys, or third parties.

Health care reform legislation H.R. 5502, recently introduced by Congressman Pete Stark (D-CA), has a major provision for the establishment of a National Health Anti-Fraud and Abuse Program. This proposal would create a nationwide, all-payer health fraud control program, greatly expanding federal enforcement resources, and establish federal penalties for those convicted of health fraud or abuse. This new program would be funded through fines collected in the fraud control program it administers. While the ultimate fate of H.R. 5502 has yet to be decided, the anti-fraud provisions of the Stark bill appear to have broad bipartisan support in the Congress and could very likely be passed in the near future.

Estimates of the dollar volume of health fraud in our nation's $800 billion health care economy vary, but estimates range as high as 25 percent of all health service billings. Even after adjusting for defensive practice care, billions of dollars are fraudulently taken from the health care payment systems and from the pockets of unfortunate consumers every year.

In the months ahead, all health care providers should be prepared for more of this type of aggressive enforcement activity, from both state and federal agencies. The positive publicity this kind of activity is generating for the agencies involved, the genuine dollar savings to the public, and pressure from politicians to be more active on the health fraud front, all but guarantees intense activity in the fraud and abuse area.

Ethical practitioners who are acting within the law have nothing to fear and should tolerate no nonsense from any law enforcement agency. ICA is willing to assist any government agency in any legitimate investigation but urges DCs to be on their guard for "witch hunting" expeditions by law enforcement officials.

There is no evidence to indicate that chiropractic is being targeted in any way in these fraud investigations. However, it is impossible to deny that some within our profession are operating in a fraudulent manner as the current wave of enforcement operations has resulted in the arrests of a number of chiropractors. The behavior of a greedy and foolish few can do disproportionate damage to the profession as a whole. Chiropractors have a professional obligation to strive for optimum care delivery, providing such care as a patient genuinely needs, no more and certainly no less.

The current wave of health fraud arrests should be ample warning to DCs who are tempted to obtain payment for services not rendered, deliver care that is clearly not needed solely for economic gain or seek to involve patients in illegal scams. Those who engage in such illegal behavior deserve the fines and jail terms they are likely to get. As well, we at ICA believe that chiropractors who engage in such illegal activities are not only public enemies, they are also enemies of the chiropractic profession.

James D. Harrison
ICA General Counsel
Arlington, Virginia

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