7th Annual Fraud & Computer Crimes Seminar
The Tampa Bay Chapter's 7th Annual Fraud &
Computer Crimes Seminar promises to be a good one. The location
(Ruth Eckerd Hall) is booked; the food and beverages are
ordered; the speakers have committed; and their topics are confirmed.
Information is available on our web
site at:
http://tampabaycfe.org/seminar.htm.
A Serious and Costly Reality For All
Americans
Since the early 1990s, health care fraud – i.e., the
deliberate submittal of false claims to private health
insurance plans and/or tax-funded public health insurance
programs such as Medicare and Medicaid – has been viewed as a
serious and still-growing nationwide crime phenomenon, linked
directly to the nation’s ever-growing annual health care
outlay, which in calendar-year 2003 alone amounted to $1.7
trillion (the Office of the Actuary, Centers for Medicare &
Medicaid Services). This represents a growth of 7.7 percent
over the prior year.
That Some Health Insurance Claims Are Fraudulent is Beyond
Dispute
It is an undisputed reality that some of the more than 4
billion health insurance benefit transactions processed in the
United States every year are fraudulent. Although they
constitute only a small fraction, those fraudulent claims
carry a very high price tag.
Each year, for example, the Office of Inspector General of the
U.S. Department of Health and Human Services conducts a formal
audit of the Medicare program’s fee-for-service claim payment
system. On February 21, 2002, the HHS-OIG reported its
finding that of the $191.8 billion such claims paid in 2001,
6.3 percent – amounting to $12.1 billion – should not
have been paid due to erroneous billing or payment, inadequate
provider documentation of services to back up the claims
and/or outright fraud.
In May, 2004, the National Health Care Anti-Fraud Association
(NHCAA) reported in its Anti-Fraud Management Survey that 52
of its member insurers collectively recovered or prevented
payment of $503 million in 2003 as a direct result of their
anti-fraud activities – a great deal of money, but barely a
measurable fraction of the total estimated loss.
The bottom line: The NHCAA estimates that of the nation’s
annual health care outlay, at least 3 percent – or $51 billion
in calendar-year 2003- is lost to outright fraud. Other
estimates by government and law enforcement agencies place the
loss as high as 10 percent of our annual expenditure – or $170
billion – each year.
Although the immediate targets and victims of that fraud are
private health payers and government-funded health plans, all
of us ultimately pay for the crime – through higher health
insurance premiums (or fewer benefits) for employers and
individuals, higher taxes, and higher insurance co-payments
for privately and publicly insured patients.
The Involvement of Organized Criminal
Groups
So strong an invitation to some is the country’s ever-larger
pool of health care money that in certain areas – Florida, for
example – law enforcement agencies and health insurers have
witnessed in recent years the migration of some criminals from
illegal drug trafficking into the safer and far more lucrative
business of perpetrating fraud schemes against Medicare,
Medicaid and private health insurance companies.
In South Florida alone, government programs and private
insurers have lost hundreds of millions of dollars in recent
years to criminal rings – some of them based in Central and
South America – that fabricate claims from non-existent
clinics, using genuine patient-insurance and provider-billing
information that the perpetrators have bought and/or stolen
for that purpose. When the bogus claims are paid, the mailing
address in most instances belongs to a freight forwarder that
bundles up the mail and ships it off shore. |
TRAINING
Association of Certified Fraud Examiners
17th Annual ACFE Fraud Conference and Exhibition
CPE Credits: 44
7/9/2006 - 7/14/2006
The Venetian
3355 Las Vegas Blvd.
Las Vegas, NV 89109
(877) 283-6423
(702) 414-1000 (Fax)
Room Rate: $169.00 - subject to availability
Tampa Bay Chapter
Dinner
Meetings
Annual Meeting
April 11, 2006
"Health Care Fraud, Waste and Abuse"
7th Annual Fraud & Computer
Crimes Seminar
May 9 - 10, 2006
Ruth Eckerd Hall
1111 McMullen Booth Road
Clearwater, FL 33759
2005 - 2006
OFFICERS &
DIRECTORS
PRESIDENT
Steve
Hooper, CIA, CFE, CCSA
Clerk of the Circuit Court
Hillsborough County, FL
(813) 276-2029 x3703
VICE PRESIDENT
Christine Dever, CPA, CFE
SECRETARY
Kara Preston, CFE
Polk County Sheriff's Office
(863) 499-2400
TREASURER
Laura Krueger Brock, CFE, CPA
Cherry, Bekaert, Holland, LLP
(727) 822-8811
DIRECTOR
Mark Dubina,
CFE
Florida Department of
Law Enforcement
(813) 878-7366
DIRECTOR
Ellen Wilcox, CFE
Florida Department of
Law Enforcement
(727) 298-2482
DIRECTOR
Penny Borjas, CFE, CIA
ACL Certified Trainer
CHAPTER TRAINING
Wayne Boytim, CFE
City of Tampa,
Internal Audit
(813) 274-7167 |
A Federal Crime with Stiff Penalties
In response to these realities, Congress—through the Health
Insurance Portability and Accountability Act of 1996 (HIPAA)—specifically
established health care fraud as a federal criminal offense,
with the basic crime carrying a federal prison term of up to
10 years in addition to significant financial penalties. [United
States Code, Title 18, Section 1347.]
The federal law also provides that should a perpetrator's
fraud result in the injury of a patient, the prison term can
double, to 20 years; and should it result in a patient's
death, a perpetrator can be sentenced to life in federal
prison.
Congress also mandated the establishment of a nationwide
"Coordinated Fraud and Abuse Control Program," to coordinate
federal, state and local law enforcement efforts against
health care fraud and to include "the coordination and
sharing of data" with private health insurers.
In their capacities as health insurance regulators, many
states also have responded vigorously since the early 1990s,
not only by strengthening their insurance fraud laws and
penalties, but also by requiring health insurers to meet
certain standards of fraud detection, investigation and
referral as a condition of maintaining their insurance or
HMO licenses.
Source: http://www.nhcaa.org/about_health_care_fraud/ |
News from the ACFE
CPE Compliance Reminder
Your 2005 Continuing Professional Education
(CPE) Compliance confirmation may be past due! CPE
Compliance/ACFE Bylaw confirmation was due online before Jan 31,
2006. Login to the My
Account section on ACFE.com to check your compliance status.
Who is required to certify compliance with
CPE requirements?
All CFEs in Active, Lifetime, and statuses certified before Jan
01, 2005.
If you use the CFE designation professionally,
CPE is required. For information on Retired and Inactive
statuses, please contact
Member Services at
(800) 245-3321 or +1 (512) 478-9000.
ACFE has simplified requirements on how CFEs
communicate compliance with annual CPE credits earned. It’s as
easy as 1-2-3!
-
Earn at least 20 total credits between January
and December each year, 10 of which must be fraud-related
-
Certify compliance for the preceding year by
January 31st as requested by ACFE. ACFE’s online certification
form updates your record instantly
-
Maintain documentation of earning your CPE
credits for up to three years in case you are randomly
selected for an ACFE CPE audit.
That’s it! No detailed reports, no confusing
deadlines, and no worry whether a mailed or faxed document
arrived by the deadline.
Read about CPE requirements and acceptable forms
of credit in the
Career Center and then confirm your CPE compliance in
the My Account
section on ACFE.com today!
Please contact
Member Services at
(800) 245-3321 or +1 (512) 478-9000 if you have any questions. |
Chapter News
Chapter Elections
It is that time of year again . . . Chapter Elections.
Chapter CFEs and Associate Members are eligible to vote.
Please cast your ballot by visiting
http://tampabaycfe.org/ballot.htm.
 Scholarship Winner
Kevin Ferzoco was selected by the Chapter Board of
Directors to receive a $500 graduate student scholarship.
Kevin is in his second term at the University of Tampa,
working on his MBA with a concentration in accounting. He
is the graduate assistant to Professor Lisa Bostick at the
University. An early assignment to research fraud articles
in the Wall Street Journal was the key to his gaining a
keen interest in fraud. He is registered to attend her
fraud class later this year and expressed the desire to
take the CFE examination. Kevin is a graduate of Babson
College in Massachusetts and finished with a cumulative
3.06 GPA. At the University of Tampa, his GPA is 3.21. |
Dinner Meeting News
 Our
next Dinner Meeting is scheduled for April 11th
Alice H. Pandolfi RN, CFE, AHFI,
Director Special Investigations Unit, WellCare, will present
"Health Care Fraud, Waste and Abuse" at our March 14 Dinner Meeting. Alice went to Nursing School in
Boston in the late sixties. In 1985, she joined Aetna in Connecticut
for a nearly 20 year journey, the last 10 years managing their
Special Investigations Unit. Along the way she acquired her Masters
in Management from Renssellaer, her Certified Fraud Examiner
designation and AHFI accreditation. In addition, Alice is board
certified in Quality Assurance, Utilization Review and Managed Care.
Recently moved to Florida, she joined WellCare as their Director of
Special Investigations. Alice is presently on the Board of Governors
for the National Health Care AntiFraud Association.
Most providers and members are
honest. Unfortunately some providers and beneficiaries are
not. Fraud is the intentional deception or misrepresentation
that an individual knows to be false and makes knowing that
the deception could result in some unauthorized benefit to
them or some other person.
It is estimated that 100
Billion dollars per year is lost to Health Care Fraud and its
partners; waste and abuse. It is not a victimless crime. It
affects each one of us by increasing our insurance premiums,
creating new more complex restrictions to receiving health
care i.e., co-pays, deductibles, drug step therapy,
pre-certification, and limits on the number or frequency of
some types of care.
The dinner meeting will be held at the Clarion Hotel Tampa
Westshore, located at 5303 West Kennedy Blvd., 11th floor. The hotel
is just west of Westshore Plaza on the north side of Kennedy Blvd. Evenings will begin with a social at 6:00 P.M.,
followed by a buffet dinner at 6:30 and a presentation at 7:00. The
cost remains only $15.
To make your reservation, please use the following link
Chapter
Meeting Reservation and complete the form at the bottom of
the page. You can also make your reservation by emailing
Wayne
Boytim or calling him at (813) 274-7167 by the Friday before the
meeting date. Reservations will be accepted after that date and
walk-ups are always welcome. Please remember that cancellations are
accepted up to the afternoon of the meeting. No shows will be billed
after the second missed meeting. Please help us keep our costs down
by letting us know if you are unable to attend.
February 7th Dinner Meeting
 During
his presentation on real estate fraud, Silvio Cherjovsky,
President and CEO of Grasil, Inc., scared us all
about entering into a real estate contract. Undoubtedly,
engaging in a real estate transaction without representation is
not for the amateur. There are many people involved. Typically
the real estate agent, an Appraiser, the Inspector, the Lender,
the closing agent, the seller or buyer and you will all have a
say in what’s what. All of who have a vested interest in the
monetary outcome of the deal. So it is no wonder that real
estate fraud is committed often. There are many schemes, to
include but not limited to, foreclosure bailout, home equity and
home renovation fraud, rental fraud, deceptive timeshares, ID
theft, and mortgage fraud. Mortgage fraud is easily done because
there are so many forms to understand. Without a general
understanding of multiple page title searches and mortgages, you
can get cheated fairly easy.
In recent years, the State of Florida lowered the pass
percentage needed to pass the Real Estate state exam. The
lowering of this requirement has allowed for more substandard
real estate agents. Additionally, about $2000.00 is all that is
needed to declare you as a full-time real estate agent. This
amount is a little more expensive to become a REALTOR. But both
REALTORS and real estate agents are legally allowed to engage in
transactions. Another cause for increasing fraudulent
transactions is the spike in population. With the demand so high
to get in on the real estate market boom, more and more
fly-by-night companies are opening their doors.
Considering the percentage of real estate transactions that
happen every day, it is expected that there will be snags along
the way. Buying a house is not as simple as paying thousands of
cash, signing a few papers, and transferring the keys. Most
REALTORS are honest hard-working people. But for those few who
are not, it is good to know that there is someone out there like
Silvio, who can protect the client.
Submitted by: Kara Preston,
Chapter Secretary
|
The
Department of Health and Human Services
And
The Department of Justice
Health Care Fraud and Abuse Control Program
Annual Report For FY 2004
Executive Summary
The Health Insurance Portability and Accountability Act
of 1996 (HIPAA) established a national Health Care Fraud and
Abuse Control Program (HCFAC or the Program), under the
joint direction of the Attorney General and the Secretary of
the Department of Health and Human Services (HHS)
1, acting through the Department’s
Inspector General (HHS/OIG), designed to coordinate federal,
state and local law enforcement activities with respect to
health care fraud and abuse. In its eighth year of
operation, the Program’s continued success again confirmed
the soundness of a collaborative approach to identify and
prosecute the most egregious instances of health care fraud,
to prevent future fraud or abuse, and to protect program
beneficiaries.
Monetary Results
During 2004, the Federal Government won or negotiated
approximately $605 million in judgments and settlements, and
it attained additional administrative impositions in health
care fraud cases and proceedings. The Medicare Trust Fund
received transfers of more than $1.51 billion during this
period as a result of these efforts, as well as those of
preceding years, and an additional $99 million in federal
Medicaid money was similarly transferred to the Centers for
Medicare and Medicaid Services (CMS) as a result of these
efforts. The HCFAC account has returned over $7.3 billion to
the Medicare Trust Fund since the inception of the program
in 1997.
Enforcement Actions
In FY 2004, U.S. Attorneys' Offices opened 1,002 new
criminal health care fraud investigations involving 1,685
potential defendants. Federal prosecutors had 1,626 health
care fraud criminal investigations pending, involving 2,361
potential defendants, and filed criminal charges in 395
cases involving 646 defendants. A total of 459 defendants
were convicted for health care fraud-related crimes during
the year. Also in FY 2004, the Department of Justice opened
868 new civil health care fraud investigations, and had
1,362 open civil health care fraud investigations. The
Department of Justice filed complaints or intervened in 269
civil health care cases in 2004.
For the full report, visit
http://www.usdoj.gov/dag/pubdoc/hcfacreport2004.htm.
Dishonest Health Care Providers Take the
Greatest Toll
Individual patients can, and in some cases do, commit health
care fraud—either on their own or in collusion with dishonest
health care providers. By far the greatest damage, though, is
attributable to fraud committed by dishonest health care
providers. This is not because large numbers of physicians and
other health care professionals are dishonest. On the
contrary, the vast majority are honest and ethical, and they
too are victimized both by the dishonest few within their
professions and by the increasing number of professional
criminal operations that pose as health care providers for
purposes of committing fraud.
The few who make up that dishonest minority, however, have all
the necessary tools with which to commit ongoing fraud on a
very broad scale:
-
The entire population of insured patients to attract and
exploit;
-
The entire range of potential medical conditions and
treatments on which to base false claims; and
-
The ability to spread false billings among many insurers
simultaneously, increasing their fraud proceeds while
lessening their chances of being detected by any one
insurer.
The most common types of fraud committed by dishonest
providers are:
-
Billing for services that were never rendered—either
by using genuine patient information to fabricate entire
claims or by padding claims with charges for procedures or
services that did not take place;
-
Billing for more expensive services or procedures than
were actually provided or performed, commonly known as "upcoding"—i.e.,
falsely billing for a higher-priced treatment than was
actually provided (which often requires the accompanying
"inflation" of the patient's diagnosis code to a more
serious condition consistent with the false procedure code);
-
Performing medically unnecessary services solely for the
purpose of generating insurance payments—seen very often
in nerve-conduction and other diagnostic-testing schemes.
Recently, the Rent-a-Patient schemes in Southern California
have resulted in clinics performing unnecessary, and
sometime harmful, surgeries on patients who have been
recruited, and paid, to have these unnecessary surgeries
performed; and
-
Misrepresenting non-covered treatments as medically
necessary covered treatments for purposes of obtaining
insurance payments—widely seen in cosmetic-surgery
schemes, in which non-covered cosmetic procedures such as
"nose jobs," "tummy tucks," liposuction or breast
augmentations, for example, are billed to patients' insurers
as deviated-septum repairs, hernia repairs, or lumpectomies.
The illicit proceeds of such schemes typically amount to very
significant sums of money. In cases involving individual
dishonest providers, it is not uncommon to see schemes in
which the thefts have ranged from a few hundred thousand
dollars to several million dollars in a relatively short
period—e.g., two, three, or four years—prior to their
detection.
In November, 2001, for example, an Arlington, Texas
chiropractor was sentenced to five years in prison after
pleading guilty to masterminding a broad-based scheme
responsible for submitting $5.7 million in false claims—of
which $3.2 million were paid—to a variety of health insurers
over a five-year period. (In the same scheme, one physician
was convicted, two more submitted guilty pleas, and two former
physicians were indicted).
In “institutional” cases, involving such perpetrators as
hospital chains, national laboratory companies,
transportation, pharmaceutical and medical equipment
companies, the totals in various federal criminal and civil
fraud cases of recent years have ranged from tens of millions
to hundreds of millions of dollars. Several recent
high-profile fraud cases involving hospital chains and
pharmaceutical companies, for example, have resulted in
criminal and/or civil settlements ranging from $600 million to
$850 million.
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