Don't be a Typhoid Mary: Health Care Fraud During a Pandemic
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In the early 1900s, a woman named Mary Malone, an immigrant from Ireland, began work in New York City as a cook for a large family. While working in the home, 11 people got sick with typhoid fever. A sanitary engineer — we would call them an investigator or tracer today — traced this outbreak to Mary. He discovered that Mary had worked with eight other families, seven of which who also experienced outbreaks of typhoid fever. And thus, she was given the moniker Typhoid Mary.
“What was interesting about Mary was that she didn’t show any symptoms,” said Jacqueline Bloink, CFE, a consultant and speaker at the virtual 31st Annual ACFE Global Fraud Conference. “She was asymptomatic of the typhoid fever and so she really didn’t see that she was sick.”
That year in NYC there were around 3,000 cases of typhoid fever, many traced back to Mary. She was contained in a sanitarium for some time, but was released in 1915 under the agreement that she wouldn’t work as a cook any longer. She didn’t follow that protocol, however. She changed her name and took on a job as a cook for a maternity hospital in New York, where she infected at least 25 people, killing at least two.
The Typhoid Mary story sounds eerily familiar, but it’s also indicative of the similarities in pandemic response through the years. Also similar is the way in which fraud creeps into the life cycle of pandemics.
During the Spanish Flu of 1918-1919, one of history’s largest pandemics, fraud schemes ran rampant. Bloink shared a few with attendees, many of which included advertising clippings. In “Pepto: The Red Blood Builder,” the marketing encouraged people to buy their product to, “build up your blood and body with Gude’s Pepto-Mangan,” though it wasn’t scientifically proven to help.
“Early advertising of preventative cures often didn’t have scientific reason or validity to them,” Bloink said.
One of the early health care fraud investigators was Arthur Cramp, M.D., with the American Medical Association (AMA). He wrote several volumes on nostrums and quackery for the AMA and was one of their lead investigators. One of his first cases, according to Bloink, was a man from Michigan who claimed he could look at urine and determine if the person had a disease. Cramp identified it as a scheme in the early 1900s.
“He wanted to rid the world of people who were quacks and he called them parasites,” Bloink said. “He also looked at the way these nostrums and quacks were being passed around, and it was due to the fast printing presses. If we compare that today, we look at internet, email, websites, social media, eBay or Craigslist, that promotes finding a cure or for fraudsters to try to peddle items.”
Cramp was ahead of his time, though. It wasn’t until fairly recently that institutions and fraud strike forces implemented preventive measures and controls. According to Bloink, proper handwashing as a preventive measure didn’t come on the scene until the 1990s. In 1996, the Health Care Fraud and Abuse Control Program was created out of the Health Insurance Portability and Accountability Act of 1996 (HIPAA). This was created for both private and public health plans.
Tackling health care fraud in a COVID-19 world
”We need to look at how health care fraud could occur with COVID-19 and how to investigate health care fraud schemes,” Bloink said.
Right now, the Federal Provider Relief Fund enhanced the hospitals reimbursement for a COVID-19 death by 20% in an attempt to offset the money hospitals are losing due to fewer elective surgeries and preparing for the pandemic. “So, using a COVID-19 diagnosis, we’ll have to look at that with different cases that might have alleged fraud in it regarding the actual diagnosis of the patient and did it justify that 20%? We’ve seen other cases that diagnoses are used for fraud, such as the Michigan doctor in 2013 who gave chemotherapy to over 535 patients that never had cancer.”
Bloink also warned attendees about telehealth fraud, which she called a Pandora’s Box. “This is going to be something we’re going to see a lot more of now that we’ve relaxed the rules due to COVID-19 and a lot of our physician provider visits are occurring from the home,” she said.
She cited these common issues:
Visits that aren’t in person. “How are you [the fraud examiner] going to verify that the visit occurred?” she asked. “This is a question auditors are going to be asking often.”
Relaxed rules for documentation and signatures for certain services. “So, again, how do we say this occurred if we don’t even have a signature?”
New lab test codes.
New diagnoses codes.
Copay collections are happening in new ways, so aren’t as easy to track.
At-home visits. Which professionals are allowed to conduct these? And some “providers” are claiming to be qualified and certified in specific practices that they’ve never even studied or practiced.
Phantom patients. Are providers recruiting “patients” who have nothing wrong with them to act as patients?
In addition to telehealth fraud, Bloink warned that there will be an uptick in COVID-19 diagnosis code schemes, signature schemes, and COVID-19 testing and reporting schemes.
“So, how do we prevent this?” she asked. “Our compliance teams need to identify the potential for the COVID-19 fraud schemes. They need to implement this into their compliance plan and policies.” She continued that they’ll need to have open communication and education. They’ll need to have an audit plan — what are they going to look for to prevent fraud in their entity?
“There needs to be education and tools to teach our providers about telehealth,” Bloink said. “What are the codes they can use and what are the codes they cannot use?” And put everything in well-publicized guidelines so the providers know what happens if they don’t follow the rules.
“Let’s not be like Typhoid Mary where she’s told not to go back to work with the public and ends up working at a maternity hospital.”
