DENTAL PRACTICE ARTICLES
Is Committing Insurance Fraud Helping or Harming Your Patients
Is Committing Insurance Fraud Helping or Harming Your Patients
Based on the calls that I receive from doctors , as well as analysis of my current and past client base, I have discovered that approximately 50% of dentists who have contacted me have experienced, or are currently experiencing, some level of fraud or embezzlement in their offices. The alarming statistic leads me to wonder how many dental offices are experiencing this at some level and either don’t know what is happening or may be aware that something is wrong but don’t want to take action due to the fear of repercussions from the fallout. It’s important to note that in all cases, the offices accepted assignment of benefits.
This explains why I don’t always get a warm fuzzy welcome from some staff members when I am hired as a consultant to analyze the practice. If an employee is hiding something, she does not want a ‘consultant’ snooping around and asking her questions. Although I am never looking specifically to find fraud, it always rears its ugly head when I ask questions about obvious discrepancies in the management reports. In one case, it was the reaction of the manager that provided me with a clue that I might have stumbled onto something. She became very agitated and red in the face when I asked her a very benign question. Judging by her bizarre behaviour, I decided to do a little more digging before I reported my findings to the practice owner. It’s no wonder why she didn’t want a consultant coming into the practice. She was hiding a lot and committing outright fraud.
The Robin Hood Syndrome
There is a saying that the road to hell is paved with good intentions. The person responsible for the actions was a long-standing employee who may not have started out to commit fraud. She may have been thinking that she was doing something good to help the patient receive his/her full benefit entitlement. By changing the codes to help the office or the patient receive 100% of the fees and not to have to deal with the copayments, was doing something good for the patient. After all, insurance companies are the richest financial institutions in the world and the poor dental patient who couldn’t afford treatment otherwise. Now the perpetrator has become the ‘heroine’ to the patient, because the patient did not have to pay the insurance copayment. There is also a sense of unfairness or entitlement whereby the perpetrator will justify her actions because, in her mind, the patient needed the treatment and it should have been covered.
How does she do it? It may seem counterintuitive to describe how easily fraud can be committed, but the intent of this article is not to help the perpetrator, because she already knows how to do it and has been getting away with it. The following examples are intended to help the dentist know what to look for if he suspects something is going on and then what actions he should take.
Here are some examples based on actual cases:
A client was contacted by an insurance company to verify the payments that were made for an orthodontic case. The former office manager, who had been terminated from the practice, was creating invoices for the insurance company for double the amount of the treatment because the patient only had 50% coverage for ortho. Long after the patient had completed the treatment, the manager continued to submit claims for ortho and other false claims to the patient’s insurance company. The result was that the doctor had to reimburse the insurance company $16,000 and write a letter of apology, even though he had no knowledge of these claims being submitted. In the eyes of the insurance company, the dentist is responsible for all claim submissions
A receptionist was changing the codes on the insurance submissions. For example, if the patient had coverage for 3 units of scaling and the hygienist only coded for 2, she would change the code so that more money is received at the practice. She would also add an extra surface to a filling or code for procedures that were never performed. The submissions for procedures that were never done were all for soft tissue procedures like perio surgery because insurance companies do not request x-rays for soft tissue procedures and she knew it. She made improvements to the practice production and received a nice healthy bonus, but at what cost to the dentist. The doctor in this case had to pay back in excess of $20,000 to several insurance companies.
Changing procedure codes is one of the most serious crimes that can be committed. The chart is a legal document and it must contain and accurate and complete record of the treatment that was performed. Changing codes to lead to the doctor and the hygienist losing their licenses.
Professional Courtesies and Write Offs
In this case, the perpetrator would enter write offs to correct procedural errors instead of following the appropriate steps to make adjustments to accounts accompanied by full explanations as to why the account needed to be adjusted. Some of the dental software programs make it difficult to correct an entry, so following the path of least resistance, it may be easier to write it off or delete a transaction. The perpetrator did not want you to know how many mistakes she is making which would make her look incompetent.
The danger of this scenario is that it may be tempting to write off a transaction that was a cash based transaction and won’t be missed. When a staff member is facing her own personal financial crisis, it may be too tempting to put her hand in the cookie jar to get herself out of an immediate situation. If the employee’s hand is in and out of the cookie jar too often, eventually she will help herself to a cookie. It may only be a small amount at first, but if it is easy to do and she gets away with it, this could lead to finding ways to take larger amounts and bigger cookies. Account write offs must require authorization by the dentist accompanied by an explanation about why the account is written off. Typically account write offs are only done once per year.
Using Someone Else’s Insurance Benefits
In this case, the perpetrator knew that ‘Patient A’ had not used all of his/her benefits, and ‘Patient B’ needed treatment, so ‘Patient A’s insurance company was billed. The perpetrator would know that the claim would be covered and not challenged by the insurance company. It’s important to note that both patients were members of the same family and ‘Patient B’ did not have insurance benefits.
Who Are the Victims of Insurance Fraud?
Victim #1 – The Patient
The patient is victimized by his/her insurance benefits sometimes being maxed out. If a patient realizes that something is wrong with their insurance benefit entitlement and it is the result of what is happening at your office, they will blame you, because you are the dentist. The victim will not know, or care, that you have had a dishonest employee working for you who did these acts without your knowledge or consent.
Over-utilization of insurance benefits will result in employers not purchasing dental benefits for their employees. Dental insurance is the most costly component of a group insurance benefits plan. If the costs for the premiums rise due to the inflated utilization rate that was created by false claims, employers are likely to drop dental benefits from their employee benefits packages. When employers are faced with economic stresses, paying premiums for dental benefits become too cost prohibitive to sustain. The patient is now victimized a second time because they lose their employer paid benefit.
Victim #2 – The Doctor
If insurance companies launch an investigation and the doctor is aware of some problems that exist, but does not act on them, he/she is considered the prime suspect. In other words, the insurance company will assume that the doctor is responsible and his hands are dirty. Some insurance companies can, and will, deny any future claims that come from your office. You are considered guilty until proven innocent and even then, you are still guilty.
The doctor will also be expected to pay the insurance company back all payments that were received from fraudulent claims. That can become an administrative nightmare to sort out which claims were legitimate and which were not , costing the doctor both time and money.
In some cases the doctor may have his/her license suspended or revoked if they knowingly allowed insurance fraud to occur and did nothing about it after it was discovered. You are responsible for the actions of your employees because it is assume that they work under your direction.
Victims #3 – Collateral Damage
If the doctor and or hygienist loses their licenses, who will treat the patients? Also, the jobs for the remaining staff are in jeopardy making them victims as well. A lot of honest, hard-working people can become the collateral damage of the perpetrator’s misguided actions and the doctor’s career can be ruined.
What should you do if you suspect or detect fraudulent activity? The most important advice that you can receive is get professional help – don’t try to do it all yourself.
Follow these steps:
1. Contact a forensic investigator to begin an investigation without the knowledge of any of your employees. If the investigation shows that fraud has occurred he will guide you through to let you know what your next actions should be. If no fraud is detected, that would be good news. An experienced fraud investigation service that I recommend is Prosperident.
2. Perform a complete backup on your computer system immediately. Offsite backups are best and most dental software companies provide this service.
3. Contact an employment lawyer who specializes in employment law. I recommend Mariana Bracic from MBC Legal. Believe it or not, terminating an employee is harder than you think, even if you think you have cause for dismissal. The perpetrator will have to be terminated, but it must be done carefully so that you aren’t faced with further legal problems from a wrongful termination claim. It is important to have proper employment contracts in place as well as an employee policies manual. Employment law in Canada protects the employee and not the employer.
It is interesting to note that every office in these examples accepted assignment of benefits, which is another good reason for becoming a non-assignment practice. Within the next few years, insurance companies will force the issue because they only want to deal with their subscribers to the insurance. If your practice is assignment based and insurance driven, your practice is at risk. It’s important to treat the patient according to their clinical needs and not their insurance benefits.
If you suspect that fraud is happening in your office, don’t wait, take action quickly and get professional advice. The risks consequences of not taking action far outweigh any disruptions that may occur. Perform frequent and random checks to ensure that the services you are actually performing are the same services that are being billed. Watch the observable behavioural of your employees. In every case presented, it was the unusual or overly defensive behaviour of the employee that tipped off the dentist that something was wrong. Remember, that writing off copayments, providing professional courtesies to cover copayments, overbilling and changing codes is not helping the patients, it’s hurting them. Fraud is fraud.