American College of Physicians: Internal Medicine — Doctors for Adults ®

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How HHS defines fraud and abuse

From the October 1998 ACP-ASIM Observer, copyright © 1998 by the American College of Physicians-American Society of Internal Medicine.

How worried should physicians be about HCFA's effort to ferret out fraud and abuse in Medicare?

The OIG has repeatedly said that simple, unintentional mistakes or misunderstandings of the law do not constitute fraud. When a simple mistake is made, the case is typically referred back to the carrier for resolution or further study, and the OIG does not pursue it. In most of these instances, the physician repays Medicare for the amount that was inappropriately billed.

When it comes to fraud and abuse, the OIG is looking for a pattern of questionable billing practices. Only when such a pattern exists will the OIG conduct an investigation to determine if there was fraud—and if it was intentional.

If intent can be established, the case may be referred to a federal grand jury for criminal prosecution. If intent cannot be established but deliberate ignorance or reckless disregard of the law is clearly present, a civil false-claims charge may be filed. (Such charges can produce fines of up to $10,000 for each claim.)

According to a recent article in Medical Economics magazine, the OIG is currently investigating 1,700 cases of fraud and abuse. Of those, about 300 involve medical practices, and 80% of those have criminal fraud charges pending against them.

Over the last two and a half years, the OIG has conducted nearly 3,000 investigations of medical practices; about half were criminal cases and half were civil cases. Of those 3,000 cases, 49 resulted in criminal convictions, 54 resulted in civil judgments and 1,156 physicians were excluded from participating in Medicare.

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