Staying on Top of Health Care Fraud in Times of Crisis
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The COVID-19 pandemic threw the entire world into chaos, and as fraud examiners know, chaos creates opportunities for fraudsters. While individuals, companies and governments scrambled to stay safe, bad actors jumped at the opportunity to make a quick buck off the confusion and fear that permeated the global environment. This was especially true in an industry that became the central focus for many people — health care.
“The good news is you will always have job security,” Rebecca Busch, CFE, told attendees at the 32nd Annual ACFE Global Fraud Conference. Busch, who is the CEO of Medical Business Associates, Inc., dove into some of the fraud schemes health care professionals saw during the pandemic in her session, “Health Care Fraud in the Time of COVID-19: Current Trends and New Risks.”
“What happens when you have a crisis? You have a new distraction,” Busch said. Not only did the pandemic shift focus from noticing red flags of tried-and-true fraud schemes, but it also created new opportunities for fraud that flourished in an environment full of misinformation where people were scared and vulnerable. “We were doing triage in an environment with so many unknowns,” she said. “The last thing you think about is how people are trying to take advantage of you.”
“There is a lot of fear in this particular environment and that is a great tool for someone who is ethically challenged to take advantage of that,” Busch explained. The recommendations for social distancing also created a roadblock to sharing important information. Fraud examiners and medical professionals who may have previously been able to walk over to a colleague’s desk to discuss something fishy they saw now had to rely on virtual communication and strained schedules. “It’s a different environment of how we exchange information and pace.”
Some fraudsters adapted existing schemes to be more relevant to the pandemic. The common “grandparent” scheme, where a fraudster contacts an older adult posing as a grandchild in need still occurred. However, instead of the fraudster claiming to be a grandchild in jail or stranded somewhere, they now pretended to be sick in the hospital needing help. Robocalls and phishing emails offering fake COVID testing or vaccine information proliferated. Victims let down the guard they may have normally had up due to the uncertainty and constantly changing circumstances surrounding the virus.
Busch said that the three most common types of identity theft she saw in health care during the pandemic were:
Individual Identity Theft — the theft and use of personally identifiable information.
Medical Identity Theft — the theft and use of individually identifiable health information.
Professional Identity Theft — the theft and use of individuals’ professional licenses.
She also saw a number of schemes emerge that focused on medical billing. These included overbilling for COVID tests, overbilling for services and using miscellaneous billing codes for unnecessary diagnostic procedures that were filed under vague terms like “prevention strategy.” She explained, “Usually when you introduce new rules for payment or reimbursement, there’s going to be a window [where rates are getting figured out] … the range of fees has been very significant.” Busch said the best way to combat these fraudulent charges is to ask follow-up questions. “When you go see a provider, ask them what they’re charging you for and why … you’re entitled to understand something.”
In addition to new schemes popping up as a result of the pandemic, she also stressed the importance of not losing sight of other, more familiar fraud schemes that may be happening concurrently. “View COVID as a case study,” she said. “[Fraudsters are asking] ‘How can we use this as a distraction to do our traditional nonsense?’”
“Your analytics on COVID should continue, but what you need to do is also run your nontraditional type of activities,” Busch said. She specifically advised anti-fraud professionals in health care to do an inventory of the top 20 diagnosis codes rarely used and run a report on those in addition to COVID-related codes. Due to the confusion and focus on the pandemic, other schemes can fly under the radar. “You always have to do analytics on a parallel track.”
Ultimately, she hopes that anti-fraud professionals continue to stay alert and think outside of the box about what new schemes may pop up. “There’s an impressive amount of creativity [from fraudsters],” she said. “When you look at fraud and new trends, the first goal is always to create barriers to stop it happening.”
