Fair warning to health IT professionals: Harry Markopolos, the man who infamously warned the government that Bernie Madoff was up to something fishy, is setting his sights on Medicare fraud. And the first place he'll look for evidence is in your system's e-mails, documentation, and databases.
When Markopolos, who now works full-time investigating fraud, looks into a case, he always starts with the IT department. What does he look for? Bills submitted to Medicare by dead patients or from dead doctors, up-coding or billing for procedures that were not performed, and other fraudulent billing practices. He'll check your books for evidence of kickbacks, slush funds, and sudden inexplicable increases in revenue.
In a keynote session at the HIMSS conference in Atlanta Thursday, neurosurgeon and CNN medical expert Sanjay Gupta, MD, interviewed Markopolos about ferreting out fraud and waste in the healthcare system.
The government will increase investigation and enforcement, Markopolos said. And if they find evidence of fraud, it will be the IT professional's "worst nightmare," he says.
They'll start by shutting down your server farms and taking every piece of data they can find. Worse, they might let you think they overlooked some data, just to see if you'll produce it later upon request.
The cost of fraud
Estimates of the cost of Medicaid fraud range from $40 billion to $80 billion a year. The truth, said Gupta, is probably somewhere in between. "Fraud is everywhere, for sure," he said. And it affects "every taxpaying citizen of the United States."
It's "very common" for Medicare to get fraudulent claims from criminals posing as dead doctors, Markopolos said. Another problem—claims for an illness that does not fit with the patient's gender, such as a prostate exam for a woman.
"That's a problem," he said. (Or, suggested Gupta, men coming in for pregnancy treatment. "That's a bigger problem," Markopolos quipped.)
While Wall Street fraud robs investors of their money, Medicare fraud endangers lives and steals taxpayer dollars, Markopolos said. When a large healthcare organization is making money for illegitimate reimbursement claims, it harms other organizations that are playing by the rules.
"Medicare fraud is so pervasive, said Markopolos. "The risks of getting caught are so low and the return is so high."
The role of EMR
Electronic medical records can help identify fraud and reduce waste, Markopolos said. As systems gather and store more and more data, it will be easier to identify trends and outliers.
On the other hand, the lack of paper means there's one less trail to follow.
And EMRs themselves can be a source of fraud. For example, pharmaceutical companies can illegally pay for a high ranking on lists of treatment options. Markopolos says smaller practices, in particular, are susceptible if they use a vendor's pre-loaded formularies. Practices should create their own lists of medications, he said.
What to do?
Markopolos wants IT and other healthcare leaders to join him in the hunt for fraud. There are five ways they can help, he said.
- Get educated. It's the first thing that IT and other healthcare professionals must do, Markopolos said. One way to do that is to get involved in professional organizations that have codes of conduct that members must follow.
- Look for trends and changes in data. If a source of revenue jumps from 3% to 6% with no obvious reason, IT leaders should speak up. You can also compare data with other organizations in your area.
- Beware of vendors bearing gifts. Gifts from pharmaceutical or medical device makers are "low-hanging fruit" for fraud investigators, Markopolos said. Even if an organization chooses a device because it really does best suit its needs, it is still fraud to receive any form of compensation from the maker—and can lead to jail time. "If vendors are sending you money, that's a big problem," Markopolos said. "You don't get paid enough to put on an orange jump suit." Consider following the lead of organizations that have banned all gifts from representatives and companies, he added
- Do some profiling. Those with a propensity toward fraud tend to have a sense of entitlement, especially among doctors who feel they should be making more money. They rationalize their behavior, Markopolos said.
- Blow the whistle. If you do see fraud, speak up—even if you were involved. Why? The government tends to treat whistleblowers well, protecting their identity and giving them deals in which they can avoid prosecution. The government is looking to identify higher-ups. To blow the whistle, go to the government, the press, or call an anonymous hotline. But don't go to your organization's lawyers, he said. Or, for that matter, anyone in the C-Suite. Rather, work with your chief compliance officer if you suspect fraud.
What's next?
The government will spend more money and get more aggressive about investigation and enforcement if the healthcare industry can't get fraud under control on its own, Markopolos said. "That's the future."
One tool the government might use? Undercover patients.
Undercover work has been "a proven law-enforcement tool," Markopolos said. And it could be coming to a hospital or physician practice near you. Patients who are well will visit doctors to see if they get treatments and procedures they don't need, or if the doctors bill for work they didn't do. Hearing aids, tie clips, or pens equipped with audio and video will collect evidence that's hard to dispute.
"It's probably the wave of the future," Markopolos said.