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Tampa Bay Chapter - ACFE       http://TampaBayCFE.org          October 2008

Health Care Fraud

An estimate by The National Health Care Anti-Fraud Association (NHCAA) puts health care fraud at around 3% of all health care spending, which is around a staggering $68 billion worth of losses.  This is a conservative estimate; other agencies think losses due to health care fraud may be as high as 10% of the $2.26 trillion spent in 2007.

Health care fraud comes in many shapes and forms, and is by no means victimless.  It is not only the insurance companies who lose out but also patients.  Brandon Reagin did not know someone had stolen his medical identity until he received a call from his mother to say he was a lead suspect in a car theft in South Carolina.  Brandon, a marine, no longer lived in South Carolina as he had been posted to California after his training near Beaufort. However, someone had stolen his identity before his posting, when he a lost wallet, creating havoc in his life.  In addition to opening numerous accounts in Brandon’s name, and stealing two cars, they also created a medical nightmare for Brandon.  The thief, Arthur Watts made several hospital visits racking up almost $20,000 in medical bills; Brandon found out about the unpaid bills when he requested a copy of his credit report after the car theft.

In a case of regular ID theft there are procedures that can help sort the mess out and most companies have a plan of action; with medical ID theft it is a whole different story.  Once medical records are confused, it is almost impossible to separate the genuine patient from an imposter.  There is no single clearing house for medical records, so it is highly likely that these records would be held by any number of providers. Under HIPPA, the federal law that addresses privacy, you are entitled to a copy of your medical records.  If there is an error, you can add a correction to the record. However you cannot have information deleted, even if it is not your information.  You may even have a problem obtaining your records if it is determined that it is intermingled with someone else’s, because that person’s privacy must be protected.  False diagnosis, health benefit denial, job denial and financial ruin are all possible consequences of medical ID theft.

Providers can also be the victims of medical fraud when criminals use their information to submit fraudulent claims.  In the drop box scheme criminals, obtain beneficiary and provider information, and bill insurance plans for medical services that have never been provided.  Insurance payments are then sent to a rented drop box, which may be registered with phony identification.  Once payment is received, it is quickly deposited into a corporate account and then either immediately converted to cash or transferred to other accounts out of the reach of authorities.  Some schemes actually allow the criminals to receive the funds direct to their bank accounts instead of through a private mailbox.

As well as being the victim of medical fraud, providers can also be the perpetrators of the crime.  According to NHCAA the most common types of fraud committed by dishonest providers include:

  • Billing for services that were never rendered—either by using genuine patient information, sometimes obtained through identity theft, 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 "up coding"—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.

  • 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” are billed to patients' insurers as deviated-septum repairs.

Tampa Bay Chapter

Dinner Meetings

October 14, 2008
"Health Care Fraud"
Scott Flint and Shaka Scott, Broad and Cassel

January 13, 2009
"PBS&J Embezzlement Scheme"
Gary Jordan, Post, Buckley, Schuh & Jernigan

February 10, 2009
"Medicaid Fraud"
Carol Conry, Lieutenant, Medical Fraud Control Unit, Office of Attorney General

March 10, 2009
"Contractor Fraud"
Richard B. Campbell, Esquire
Carey, O'Malley, Whitaker & Mueller, P.A. 

10th Annual Fraud & Computer Crimes Seminar

May 12-13, 2009
Ruth Eckerd Hall
Clearwater, Florida
1111 McMullen Booth Road
Clearwater, FL 33759

2008 - 2009
OFFICERS & DIRECTORS

PRESIDENT
Steve Hooper, CIA, CFE, CCSA, CGAP
Clerk of the Circuit Court Hillsborough County, FL
(813) 276-2029 x3703

VICE PRESIDENT
Christine Dever, CPA, CFE
City of Tampa
(813) 274-7166

SECRETARY
Ellen Wilcox, CFE
Florida Department of Law Enforcement
(727) 298-2482

TREASURER
Laura Krueger Brock, CPA, CFE
Kirkland, Russ, Murphy & Tapp, P.A.
(727) 572-1400

DIRECTOR
 Mark Dubina, CFE
Florida Department of Law Enforcement
(813) 878-7366

DIRECTOR
Sharon Shaw, CFE
Tel: (727) 674-8399

DIRECTOR
Debbie Venanzio, CFE
Branch Banking & Trust Co.
Tel: (727) 302-5498

DIRECTOR
Bill Miles, CFE
Florida Department of Law Enforcement
Tel: (863) 701-1474

DIRECTOR
Gary Chapman, CIA, CGAP, CFE
City of Tampa
Tel: (813) 274-7163

CHAPTER TRAINING
Wayne Boytim, CFE
Retired
(813) 274-7167

  • Falsifying a patient’s diagnosis to justify tests, surgeries or other procedures that aren’t medically necessary.Unbundling - billing each step of a procedure as if it were a separate procedure.

  • Billing a patient more than the co-pay amount for services that were prepaid or paid in full by the benefit plan under the terms of a managed care contract.

  • Accepting kickbacks for patient referrals.

  • Waiving patient co-pays or deductibles and over-billing the insurance carrier or benefit plan.

Healthcare fraud investigations are lengthy, labor intensive, and involve complex issues.  Documentation has to be carefully studied, and interpretation of legislation has to be carefully reviewed.  What were the circumstances of the claim? Was there some confusion or lack of education?  It has to be established if there was wrongful intent, and if there was, what was it.  Malum in se, which is conduct that is assessed as inherently wrong by nature, independent of regulations governing the conduct; or was it Malum prohibitum, which is wrong only because it is prohibited? 

When dealing with healthcare fraud, Government agencies have to be especially careful with regard to Brady & Giglio material.  Any evidence in the Government’s possession that is favorable to the accused and that is material either to guilt or punishment, including evidence that may impact the credibility of a witness, must be disclosed.  They must also turn over any material, which may tend to impeach the character or testimony of their witness during a criminal trial.

Some recent convictions from healthcare fraud investigations have included prison sentences, asset forfeiture and millions of dollars in restitution.  Recent case exerts from public record documents on file can be found at the following link: Examples of Healthcare Fraud Examinations FY2008

Sources:

The Problem of Health Care Fraud
Medical Identity Theft Turns Patients into Victims
Health Care Fraud: Schemes to Defraud Medicare, Medicaid, and Private Health Care Insurers

News from the ACFE

ACFE Celebrates 20th Anniversary

The ACFE is commemorating 20 years of leadership in the fight against fraud. Celebrations will start with the November/December issue of Fraud Magazine, and continue through to the 20th Annual Fraud Conference and Exhibition in Las Vegas. Thank you to all the members, past and present, who have contributed to the growth and success of the ACFE for the past 20 years.

Visit the two new online communities - Anti-Fraud Technology and Financial Institutions.

Connect with other ACFE Members, access shared documents, blog or participate in discussion forums. To access the new communities, click here to get started.

Fraudster videos, original articles and more in the new Fraud Examiner newsletter!

Your members-only e-newsletter has a new design and brings more exclusive benefits to your inbox every month. Are you a subscriber? Edit your profile below to manage your subscriptions. Click here to view a recent issue.

Enroll in the new Auto Dues Service and receive a 5% discount.

With this new member service you will be able to save time and set up your membership dues to be paid automatically each year. Click here to enroll.

New Continuing Professional Education (CPE) Dashboard

All your CPE information in one convenient place. Browse the CPE Dashboard for information and updates about: How CPE Works, 2008-2009 CPE Transition and My CPE.

New Guidelines For Fighting Fraud Released

New guidelines for fighting fraud have been released jointly by three leading professional organizations. "Managing the Business Risk of Fraud: A Practical Guide" is sponsored by the ACFE, The Institute of Internal Auditors (IIA), and the American Institute of Certified Public Accountants (AICPA). Principles for establishing effective fraud risk management, regardless of the type or size of an organization, are outlined in the guide.

Download "Managing the Business Risk of Fraud"

Chapter News

FDLE’s “Special Agent of the Year”

A special hats off to Ellen Wilcox. Ellen is FDLE's 2008 "Special Agent of the Year". Accompanied by FDLE Commissioner Gerald Bailey, Chief Financial Officer Sink recognized Ellen at the Florida Cabinet's September 30th meeting. Ellen has been an active member of the Tampa Bay Chapter nearly since its inception. She has served on the Chapter's Board for a number of years and as its President in 2001-2002. In 2005, Ellen received the ACFE's Distinguished Achievement Award for her service and contributions to the Chapter. Ellen was instrumental in getting our Fraud & Computer Crimes seminar off the ground and much of its success is due to her efforts. This year, she is serving as the Chapter's Secretary and the Chair of the Community Service Committee. The Chapter is grateful for her service and proud of her accomplishments.

FDLE Press Release: Special Agent (SA) Wilcox was selected as FDLE’s “Special Agent of the Year” as a result of her outstanding investigative efforts. SA Wilcox is a nationally recognized expert in the field of mortgage fraud. She served as the case agent on a complex mortgage fraud investigation that included victims both in Florida and other states. As a result of her tenacious investigative work, 10 brokers and lenders were arrested for fraudulent mortgage loans. Those arrested were responsible for submitting approximately 180 loans totaling nearly $18 million. Wilcox joined FDLE in 1980.

Tampa Bay Ethics Award

For the past seventeen years, the Center for Ethics at the University of Tampa's John H. Sykes College of Business has chosen a deserving person to receive the Tampa Bay Ethics Award. This award was created to recognize role models in our community whose lives and careers demonstrate the types of positive qualities - like responsibility, respect, trustworthiness, caring, justice, and citizenship - that we would all like our fellow citizens to emulate.

This year, Mr. Frederick B. Karl was honored as the 2008 Tampa Bay Ethics Award recipient.  Fred Karl was born on May 14, 1924 in Daytona Beach, Florida. He attended the University of Florida before enlisting in the Army as a private in 1942. He served as a tank platoon leader in the European Theater of Operations and was awarded the Silver Star, the Bronze Star, and a Purple Heart medal. He later received his low degree in 1949 from Stetson University College of Law.

Karl has served the public for more than 50 years through his law career and in his public service. He has served in all three branches of the Florida government, and he was the first chairman of the City of Tampa Ethics Commission. He is the author of My War and most recently, The Power to Suspend: An Important Process for Fighting Corruption in Public Office.

A member of numerous corporate boards, Karl also was a member of the American Bar Association, The Florida Bar and the Hillsborough County Bar Association. He was a state senator for four years and a state representative for Volusia County for eight years. He served as the CEO of Tampa General Hospital for two years and was City Attorney of Tampa for one.

Karl was elected to the Florida Supreme Court in 1976. In their nomination for the ethics award, the City of Tampa Ethics Commission wrote: “It was a tenuous time for the court justices as many faced allegations of corruption, bribery and scandal. During a time when justices were facing disbarment and/or prison sentences, Fred Karl’s ethics were never questioned.”

Throughout his career, Karl has exhibited only the highest standards for ethical behavior. He tried to retire several times only to be called to return to public or private office for the betterment of the citizens of Tampa. He is finally retired today and still serves as a mentor to many people.

Dinner Meeting News

Our next Dinner Meeting is scheduled for Tuesday, October 14th

Our second dinner presentation of the year will be "Defense Perspectives on Healthcare Fraud Investigations."  Scott J. Flint, former Assistant Attorney General for the State of Florida's Medicaid Fraud Control Unit, will conduct the presentation.

Mr. Flint is now in private practice with the firm of Broad and Cassel in Tampa, where he defends physicians and other health care providers in criminal, civil, and administrative proceedings.  He has an in-depth understanding of the issues facing health care providers, both from a law enforcement and defense perspective. Mr. Flint received his law degree from Stetson University College of Law and was admitted to practice law in Florida in 1996.  Prior to the practice of law, Mr. Flint served 10 years with the U.S. Air Force as a medical technician and firefighter.

The dinner meeting will be held at the Westshore Hotel, located at 1200 N. Westshore Boulevard. The hotel is just north of I-275 and Cypress Avenue on the east side of Westshore (map). 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 is $25.00, payable at the door.

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 by September 8, 2008. 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.

What You Missed at the September 11th Dinner Meeting

Florida Department of Law Enforcement Special Agent (SA) Sharon Feola gave a presentation at the last dinner meeting on the history and use of polygraphs in criminal investigations . SA Feola has been in law enforcement for the past 23 years and has been a polygraph examiner for FDLE for two years. SA Feola attended a three month training program on Forensic Detection of Deception administering polygraphs conducted by the Northeast Counter Drug Training Center/Pennsylvania State Police Polygraph Institute in Fort Indiantown Gap, Pennsylvania.

SA Feola CFA instruction included a history of lie detection, the invention of the first polygraph instrument as well as the evolution of forensic detection of deception to the use of computerized polygraph systems and algorithms.

SA Feola conducts examinations for local, state and federal law enforcement agencies and prosecutors. However, private polygraphist can be hired who fees vary depending on the nature and circumstances of the issue. Owing to the fact that Florida does not license or certify polygraphists , SA Feola suggested checking with certified polygraph associations such as the Florida Polygraphs Association or the American Polygraph Association to get a referral to a reputable, competent examiner.

SA Feola showed an example of a polygraph that she did of a doctor suspect of Medicaid Fraud. The polygraph exam consists of three phases:

1. Pre-test Interview
2. Exam
3. Post -test Interview

SA Feola also explained how detailed her preparation must be in conjunction with the case agent in order to identify or narrow the issues to be examined and any changes the subject may make from any previous statements. The exam should cover only one primary issue and all the questions are reviewed with the examinee prior to the actual exam. All polygraph examinations are COMPLETELY voluntary. The polygraph is designed to measure the psycho-physiological changes while answering a structured set of "yes" or "no" questions. Fear and threat combined is what created the psychological set for a successful outcome. The doctor in the example provided tried to control his responses, but still showed deception during the exam.

Polygraphs can be used as an investigative tool only in criminal investigations in an effort to identify the offender, eliminate potential suspects, elicit confessions and substantiate witness testimony. Usually very few are done in a fraud investigation as the offender usually leaves a paper trail of his wrongdoing. SA Feola estimated that approximately 15% of the polygraph examinations she completes are fraud related . SA Feola primarily does polygraphs in sexual abuse, murder, robbery and other crimes of violence. All requests for an examination regardless of the criminal violation will be evaluated and assistance given.  

Submitted by Ellen Willcox, CFE Director

Brady v Maryland:
Do you Understand your Obligations?
By Steve Rothlein

Definitions:

Duty to Disclose: The landmark decision of Brady v Maryland (1963) places an affirmative constitutional duty on a prosecutor to disclose exculpatory evidence to a defendant. This duty has been extended to police agencies through case law, requiring law enforcement agencies to notify the prosecutor of any potential exculpatory information.

Exculpatory Evidence/Brady Material: Evidence in the government’s possession that is favorable to the accused and that is material to either guilt or punishment, including evidence that may impact the credibility of a witness.

The landmark decision of Brady v Marylandi and its progeny is perhaps one of the most significant Supreme Court decisions to ever impact the criminal justice system. Unfortunately, many law enforcement agencies nationwide have failed to train their officers on their obligations to disclose exculpatory material as a result of the Brady decision.

In 1963, the Supreme Court ruled in the Brady case that the government has a duty to disclose material evidence to the defense, which could tend to change the outcome of a trial. This exculpatory evidence, often referred to as “Brady Material,” could tend to prove that the accused party is innocent or cast doubt of their guilt.

What does this mean in realistic terms for law enforcement officers? The following are just a few examples of the types of situations in which investigators could find themselves aware of exculpatory evidence, which should be documented and provided to the prosecuting authorities. It is the prosecutor, under Brady, who must decide if the information is exculpatory and whether it must be disclosed to the defense. The law enforcement officer’s obligation is to inform the prosecutor of the information.

Consider the following hypothetical examples:

  • Detective Jones is handling a rape investigation and develops information of a potential suspect who was seen leaving the scene in a white pick-up truck. The investigator displays a photo line-up to the victim and she identifies the suspect, who does own a white pick-up. No forensic evidence connecting the suspect to the crime is initially discovered. During the course of the investigation, a witness is located during the area canvass who claims to have seen a beige pick-up truck in the area driven by a dark skinned male in his 30’s. The identified suspect is a light skinned male in his 20’s. The investigator does not document this information in his report because it contradicts the probable cause he has developed in his case.

  • Detective Smith is handling a murder investigation. He develops a suspect who is of limited intelligence and brings him to the station for questioning. After questioning him over a period of days, he informs the suspect that if he confesses, he will be allowed to go home. The suspect confesses and is taken into custody and charged with murder. Detective Smith fails to document his promise of allowing the suspect to go home in exchange for confessing, and does not inform the prosecutor.

  • Detective White is handling a robbery investigation in which a victim is shot. He discovers a footprint near the scene, which he has photographed and lifted. He subsequently arrests a suspect who is wearing a size 9 shoe. The foot print is a size 11 sneaker and Detective White discards the footprint evidence believing it is unrelated to the crime. He fails to document this information.

  • Detective Evans displays photo line-ups to three witnesses. Two of the witnesses identify a suspect; however, the third witness fails to identify anybody. Detective Evans documents the two positive identifications but does not document that the third witness failed to identify the suspect and Detective Evans never informs the prosecutor.

  • Detective Williams is the lead detective in a homicide case and took a confession from the defendant. His supervisor is aware that five years earlier, Williams received a suspension falsifying a police report. This information is never reported to the prosecutor.

In all of these cases, the suspects are convicted, incarcerated, and later declared innocent as a result of DNA evidence, which was not available at the time of the original investigations. Following their release, all of the individuals file multi-million dollar lawsuits against the investigators, their supervisors, and their agencies for Brady violations. Their attorneys argue successfully that had their defense attorneys been provided with the exculpatory evidence in these cases, the defendant’s might not have been wrongfully convicted.

The first question that will be asked during the litigation will be did the investigators receive any training about their duty to disclose exculpatory evidence and, secondly, did the agency have a policy in their departmental regulations requiring officers to disclose exculpatory evidence. If the answer is no training was provided and no policy existed, the agencies will likely be liable for substantial damages for failing in their duties under Brady v Maryland to disclose exculpatory evidence.

In 1972, the Giglio v United Statesii case expanded the Brady decision to require prosecutors to provide information to the defense counsel which could tend to impeach a witness. For example, if a witness is motivated to testify in exchange for a lighter sentence, that information must be disclosed. This includes information about the credibility and veracity of the testimony of police officers. If an officer has a past record of falsifying reports or other conduct which could impact their truthfulness, the Giglio Case requires that the prosecutor provide the defense with that information.

Note: It is critical that when an agency sustains charges against an officer for falsification that they ensure they have the required evidence to support that charge. Having a sustained allegation for falsification can effectively destroy an officer’s career since he/she will forever be an impeachable witness.

The best defense against the civil litigation filed as a result of Brady v Maryland is to ensure the following has been accomplished:

  • All officers have been properly trained on their obligations and duty to disclose exculpatory material.

  • The agency has a policy which requires that officers document exculpatory information and provide it to the prosecutors.

  • The agency has informed investigators via training and policy concerning their obligations as a result of the Giglio Case, including informing prosecutors of information which could impeach the testimony of their officers. Law enforcement agencies should reach an agreement with their prosecutors on the best mechanism for handling the Giglio issues involving police officers.

___________________________________
Citations:
iBrady v. Maryland, 373 U.S. 83 (1963).
iiGiglio v. United States, 450 U.S. 150 (1972).

Source: http://www.patc.com/weeklyarticles/bradyvmaryland.shtml

President's Message

We had a tremendous turn out for our September 11th dinner meeting and I want to thank all of those who attended. I also want to thank our new members who attended. They are:

  • Judith Botham – Coordinated Child Care of Pinellas

  • Paul Sottile – Valiente Hernandez, PA

  • Sue Bunevich – Moore Stephens Lovelace, PA

  • Alexandra Gaskins – Florida Department of Law Enforcement

  • Donna Mattick – Jacobs Engineering

  • Elizabeth Weigand – Internal Revenue Service

I would also like to thank our guests who were in attendance. They were:

  • Wendi Brown – Kirkland, Russ, Murphy & Tapp (Guest of Laura Brock)

  • Robert Cohen – Philadelphia Chapter Training Director (Guest of Gary Chapman)

Thanks are also extended to Special Agent Sharon Feola for an excellent presentation on the “History and Use of the Polygraph in Criminal Investigations".  Dinner meetings are an excellent opportunity to gain some new insight into a wide range of fraud related topics; early registration is recommended. Presentation opportunities are now almost filled, but suggestions for suitable speakers are always welcome.

I have been told that it is going to take some time to formulate the submission package for the Chapter of the Year Award, and I will bring you more information on this as it becomes known to me. 

We have poured the foundation for our many Committees and I look for the sub-flooring to be in-place soon. Once this happens, the structure will go up pretty fast, so committee volunteers, you can look forward to being involved soon. There will be a lot of work to be done once our structure is complete.

I hope to see you at our next dinner meeting October 14th where “Health Care Fraud” will be presented.

Steve