Unbiased Analysis of Today's Healthcare Issues

Reducing Fraud, Waste and Abuse by Prosecuting Health Care Executives

Written By: Jason Shafrin - May• 13•11

Many politicians claim that there is much fraud waste and abuse in the Medicare system. Would prosecuting executives accused of wrong-doing decrease the amount of fraud in the system? Some policymakers think so.

The recent actions of the health department go further. The Office of Inspector General (OIG) has long barred people convicted of certain offences from doing business with Medicare and Medicaid, along with doctors and nurses who lose their licences. But in October the OIG announced that it would increasingly bar executives in charge of firms that have been convicted of wrongdoing, even if they personally did nothing wrong.

Lewis Morris, the OIG’s chief counsel, insists that the office must be aggressive. In March he told Congress that corporate settlements do too little to deter fraud—cash fines, he claimed, have become a mere “cost of doing business”.

Determining executive culpability for fraudulent acts is difficult. If the executive directs his employees to commit fraud, then of course he is fraudulent. If there is a rogue individual who commits fraud, however, the executive likely should not be held liable. On the other hand, if the executive does not encourage fraud, but his management style to maximize profits may have indirectly encouraged his workers to commit fraud, does that make him liable? In OIG’s world, however, the executive may be considered fraudulent in all these cases.

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One Comment

  1. John Jupin, CFE says:

    One of the best ways to get a handle on fraud is to first educate your workforce on what is occupational fraud and how fraud exists due to pressure, rationalization, and opportunity(THE FRAUD TRIANGLE)

    I suggest that Healthcare executives check out the Association of Certified Fraud Examiners Website, http://www.acfe.com for some suggestions on using a CFE to set up a fraud prevention and detection program.

    John Jupin, CFE

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