Medicare Fraud Scandal with the Columbia/HCA Hospitals Essay Example

Medicare Fraud Scandal with the Columbia/HCA Hospitals Paper One of the most pressing issues affecting the health sector is Medicare fraud. Based on the events that rocked the health community, which involved Columbia Health Hospitals, America has decided that it is high time to pay closer attention to one of the reasons why the Medicare is bleeding to death. This paper will try to look into the events that shaped the most controversial and biggest Medicare scandal that has awakened government to act before it is too late. To assist the readers, this paper will be divided into several parts: (a) Background of the paper where information about the case being examined will be provided. In addition, an introduction of the major issue(s) to be analyzed will also be presented; (b) Analysis Section will provide a detailed analysis of the situation(s) being examined and will outline recommendations for how the issue(s) could have been handled more effectively; finally, the (c) conclusion section where we will try to summarize the purpose of the project, the issue(s) examined and the major findings/conclusions/recommendations. II. Background For this particular paper, we will look into the kind of fraud that Columbia allegedly committed against Medicare and its members. We will write a custom essay sample on Medicare Fraud Scandal with the Columbia/HCA Hospitals specifically for you for only $16.38 $13.9/page Order now We will write a custom essay sample on Medicare Fraud Scandal with the Columbia/HCA Hospitals specifically for you FOR ONLY $16.38 $13.9/page Hire Writer We will write a custom essay sample on Medicare Fraud Scandal with the Columbia/HCA Hospitals specifically for you FOR ONLY $16.38 $13.9/page Hire Writer To do so, we will need to first define what fraud is and how it is particularly committed. More importantly, we will look into how Columbia/HCA Hospitals allegedly committed the fraud and how it ultimately affected the American public as well as the American government. One fateful day in July of 1997, a series of raid launched by the government against a particular hospital conglomerate shocked America’s health care system and brought into the nation’s attention one of the biggest scandal that involved Medicare benefits of Americans. https://healtheappointments.com/private-hospital-vs-public-hospitals-essays/ In a raid conducted by federal and state agents, the main target was Columbia/ HCA hospitals in Florida. At issue were allegations that Columbia had defrauded Medicare, the deferral health insurance for the elderly and the disabled. Medicare was created by Congress in 1965 as a means to provide health benefits to Americans over the age of 65 and for the seriously disabled. In the beginning, it was said that Medicare had no effective cost control and while it did help the people it was meant to help (i. e. the elderly and the disabled), it also cost Uncle Sam a lot of taxpayer’s money. In the beginning, hospitals were reimbursed on a cost plus basis meaning that Medicare paid for the cost of service plus a fee for administrative overhead. However, in 1983, Congress passed the first significant effort to curb the skyrocketing costs of Medicare. Congress adopted a payment system based on diagnostic related groups (DRGs). Under the DRG system, hospitals would be paid per admission with an amount determined by the diagnosis instead of per day or per service. This new system helped check increasing Medicare costs but it also hurt hospitals and made them bleed profusely –at least on financial aspect. And while many hospitals saw this new change as a disadvantage, Columbia/HCA had another vision. They saw this new change as a way to increase their profits, albeit in a more fraudulent manner. In 1997, investigations were underway with regard to the alleged fraud practices employed by Columbia against Medicare. At issue in the investigation were several possibly fraudulent practices by Columbia/HCA and its managers. Among these were upcoding, cost shifting, unethical practices to pressure acquisition targets, and financial relationships with doctors. III. Analysis First things first: what is fraud and what act or acts constitutes fraud? When does one commit fraud? According to the definition of the Department of Health and Human Services, fraud is the intentional deception or misrepresentation that an individual knows to be false or does not believe to be true and makes, knowing that the deception could result in some unauthorized benefit to himself/herself or some other person. The most frequent kind of fraud arises from a false statement or misrepresentation made, or caused to be made, that is material to entitlement or payment under the Medicare program. The violator may a physician or other practitioner, a hospital or other institutional provider, a clinical laboratory or other supplier, an employee of any provider, a billing service, beneficiary, Medicare carrier employee or any person in a position to file a claim for Medicare benefits. Under the broad definition of fraud are other violations, including: the offering or acceptance of kickbacks, and the routine waiver of co-payments. According to the Find Law website, fraud schemes range from those perpetrated by individuals acting alone to broad-based activities by institutions or groups of individuals, sometimes employing sophisticated telemarketing and other promotional techniques to lure consumers into serving as the unwitting tools in the schemes. Seldom do perpetrators target only one insurer or either the public or private sector exclusively. Rather, most are found to be defrauding several private and public sector victims, such as Medicare, simultaneously. In Medicare, the most common forms of fraud include: Billing for services not furnished Misrepresenting the diagnosis to justify payment Soliciting, offering, or receiving a kickback Unbundling or exploding charges Falsifying certificates of medical necessity, plans of treatment, and medical records to justify payment Billing for a service not furnished as billed; i. e. , upcoding (Find Law, 1998) Now that we have an idea of what constitutes fraud, particularly the kind that can be committed against Medicare, we can now look more closely into the case that involved Columbia/HCA hospitals. Unlike many hospitals, Columbia/ HCA hospitals were obviously managed by a profit-oriented leader who put more emphasis on the money-yielding power of health care instead of the healing and caring aspect of the business. One key element that could have fostered the fraudulent behavior of the Columbia/HCA management is the company’s strategy of doctor ownership. Doctors were given the opportunity to become shareholders in the company –thus giving motivations to physicians to refer patients to its hospitals instead of its competitors. Moreover, as shareholders of the hospital, doctors had more incentives to hold down costs or to comply with managerial directives. It is, thus, not surprising to see how fraud could happen in such an environment. If doctors and hospitals are in it for the money, then there is no limit as to what they can do to get more financially. Just looking at the company vision or strategy of Columbia/HCA hospitals, we will see that ethics is clearly absent in the vision of management. Instead of aiming to provide quality health care to its patients, the doctors and management of Columbia/HCA are more interested in gaining more profit for the hospital and the corporation instead of giving excellent health care. While this may not be a bad gesture in the over all scheme of things, it still says a lot about the ethics of Columbia management. It would seem that the managers and doctors have lost the essence of their profession. Let me qualify that there is nothing evil in wanting to work for money. What constitutes evil is applying fraudulent means to get more profit. Now that we have an idea of what the problem is and where it lies, one recommendation that can be forwarded is the strengthening of ethics and values formation in the medical community. Doctors as well as everyone involved in the medical profession should understand that medicine is a calling, a vocation where money should come secondary to quality health care. Second recommendation would be to pressure government into providing stricter procedure for health care, particularly for Medicare. As noted by the Concord Coalition website, wherever medical guidelines are hazy and judgment calls are required, it tries to ration claims through arbitrary rules, creating a feast-or-famine reimbursement policy. It imposes huge compliance costs and produces capricious results. Worst of all, despite the estimated 45,000 pages of regulations, the system careens toward bankruptcy as costs keep rising. (Concord Coalition, 1997) More importantly, it is important to set harsher penalties for Medicare fraud cases. This is to ensure that hospitals like Columbia/HCA will learn from their mistakes and will serve as an example to all. Penalties must send the message that fraudulent acts will not go punished and will be dealt with severely by the government. IV. Conclusion It goes without saying that the controversy surrounding Medicare, Columbia/HCA, and the health system in general is a disease that needs immediate diagnosis. The purpose of this paper is to heighten awareness of the problem affecting our health care industry with the ultimate goal of finding the perfect solution to the problem. Needless to say, Medicare fraud hurts not just the beneficiaries or the members but the taxpayers in general. In other words, it affects all Americans. The raids that took place in the hospitals of Columbia/HCA should serve as a reminder that criminal acts will, sooner or later, be revealed and perpetrators will be brought to justice. In addition, we have learned from the case presented to us, that there is still need for improvement in terms of implementing the Medicare system. More importantly, we have seen that ethics plays a huge part in the Medicare scandal. It would seem that the management behind Columbia/HCA has forgotten the real reason behind their organization. It is the belief of this author that a strengthening of ethics formation in the medical community will help in changing the tides of Medicare fraud. 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