License to Steal: How Fraud Bleeds America's Health Care System

By Malcolm K. Sparrow | Go to book overview

Introduction: Who Steals, and How?

In 1992, a New York deputy attorney general and special prosecutor for Medicaid fraud control, Edward J. Kuriansky, testified to Congress regarding what he described as

A feeding frenzy on the Medicaid Program, a period of unprecedented white-collar wilding in which wave after wave of multimillion-dollar fraud has swept through nursing homes and hospitals, to clinics and pharmacies, podiatry and durable medical equipment, radiology and labs, and more recently, home health care. Each surge has brought its own special brand of profiteer in search of the next great loophole in the Medicaid system. 1

The feeding frenzy continues. As targets for fraud, major health care programs are just too attractive. Stealing a million dollars or more is remarkably easy, and carries with it little chance of getting caught. You don't even need to know much about health care. It seems no previous qualifications are required.

The general public, and most members of the medical profession, may not be aware of the extraordinary range of characters queuing up to defraud the system, nor of the unlimited creativity of men and women determined to steal from the health care complex.

The following compilation of stories--just a small sample of what goes on, and focusing mostly on folk who stole a million dollars or more--is designed to illustrate the myriad types of assault that the health system suffers, and to show the complete lack of concern perpetrators have for the damage they do to patients' health and to the health care system.

As you read these stories, please bear in mind that all these scams have been detected, and it is tempting to take comfort in that. These are the scams we know about--and we know about them mostly because the perpetrators were brazen, stupid, or excessively greedy. Mostly the less sophisticated ones get caught. Many of the cases that do come to light result from

-1-

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License to Steal: How Fraud Bleeds America's Health Care System
Table of contents

Table of contents

  • Title Page iii
  • Contents v
  • Preface vii
  • Introduction - Who Steals, and How? 1
  • Part One - The State of the Art 37
  • 1 - Control Failures 39
  • 2 - How Goes the War? 56
  • Part Two - New Frontiers for Control 81
  • 3 - False Claims 83
  • 4 - Managed Care 98
  • Part Three - The Nature of the Fraud-Control Challenge 115
  • 5 - The Pathology of Fraud Control 117
  • 6 - The Importance of Measurement 143
  • 7 - Assessment of Existing Fraud-Control Systems 162
  • 8 - The Antithesis of Modern Claims Processing 183
  • Part Four - Prescription for Progress 201
  • 9 - A Model Fraud-Control Strategy 203
  • 10 - Detection Systems 228
  • Conclusion 253
  • Acronyms and Abbreviations 257
  • Notes 259
  • Index 277
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