Corruption in health services: Reducing its impact on the patient (Part 1)

Anke Martiny, Leslie Aronowitz, Norman Inkster, Bruno Müller-Oerlinghausen, Daniel Winkler, 10th IACC, Workshop report, Civil Society

Anke Martiny, Transparency International-Secretariat, Berlin, Germany

Dr. Bruno Müller-Oerlinghausen, Germany
- Hidden Dependencies of Medical Experts
Daniel Wikler, USA
Leslie Aronovitz, USA (in absentia)
- Assuring Integrity in the US Medi-care Hospital Benefit
Norman Inkster, Canada (in absentia)
- How to Detect, Prevent and Eradicate Fraud and Abuses in the Provincial Canadian Health-care System

Meirar Elimelech, NHS Counter Fraud Service, United Kingdom
Akele T. Muma, Transparency International Cameroon
Madeleine Leijonhufrud, Stockholm University, Sweden

Contribution by Daniel Wikler

Ethics and Corruption in Health: A Complex Relationship

  1. Ethics and corruption:

    • Primary ethical allegiance is to patient, not payer

    • Continuing education and research are professional duties, but can be a cover for bribes.

  2. Corruption in health services:

    • Costs are highest in wealthy countries

    • Impact on health highest in poorer countries

    • Corruption and fraud in new forms of health organizations (e.g. HMO) may have highest health impact.

  3. Medical ethics:

    • Health is a "merit good": delivering care takes priority over controlling corruption and fraud

    • Health care (medicine) as a profession: "External" controls on corruption and fraud are viewed as intrusive and onerous; physicians are assumed to be gentlemen of good character; anti-corruption vigilance by non-physicians not a medical responsibility

    • Allocation is a medical responsibility: Physicians´ role as allocators makes them a target for fraud and corruption; physicians are largely unaware of avenues of fraud and corruption, including efforts to influence them; fraud and corruption are absent from ethics curricula.

Contribution by Leslie Aronovitz (in absentia)

Assuring Integrity in the US Medi-care Hospital Benefit

The presentation describes some of the activities of the Health Care Financing Administration (HCFA) - the agency in the Department of Health and Human Services (HHS) responsible for administering the Medicare program - and of the Department of Justice and HHS Office of Inspector General. These three agencies act as stewards , auditors and investigators over the Medicare trust fund, where in fiscal year 2000 the US spent over $200 billion for health care services on behalf of its elderly and some disabled beneficiaries. In an attempt to contain hospital costs -.the most expensive part of the Medicare program - the Congress has developed payment systems that reward efficiency, and has provided funding to these overseers to assure the integrity of hospitals' billing practices.

Some of the tools used by government entities to fight fraud, waste and abuse in the Medicare program are described, as well as how hospitals can develop comprehensive compliance programmes to prevent, detect or resolve instances of conduct within the hospital that do not conform to the law.

Mentioned is the case of a fictitious hospital that, like many hospitals in the US today, find themselves under the scrutiny of the HCFA, the Justice Department and the Inspector General. In this case, the hospital was alleged to have routinely billed Medicare incorrectly by submitting heath care claims that did not coincide with the actual care provided to its patients. Examples of erroneous billing are:

  • "upcoding", where hospitals bill for a more complex, and therefore more costly to treat, service

  • "miscoding", where the hospital bills for a different service than was provided

  • "unbundling", which is the practice of submitting bills piecemeal to maximize the reimbursement for various tests or procedures that are required to be billed together, and therefore at a reduced cost

The government has several civil oversight tools at its disposal, the most powerful undoubtedly being the False Claims Act. Under this act, people who "knowingly" submit false claims may be found liable for penalties of between $5,500 and $11,000 for each false claim, plus up to three times the amount of the damages caused to the federal program. The cumulative effect of even small overpayments can translate to significant program losses in the Medicare program because of the number of claims and providers involved. In fiscal year 2000, HCFA and its contractors processed over 900 million health care claims for services provided by about a million physicians, institutions and other health care providers.

In addition to penalties and damages, the paper discusses the development of a corporate compliance program - a series of activities tailored to the individual hospital that establishes a culture of ethical behaviour and that better assures adherence to Medicare rules.

The CEO of Memorial Hospital in this paper has several options to resolve the allegations of erroneous billing. The paper discusses the real issues hospitals face as they decide on what action is most prudent in their particular circumstances.

Contribution by Norman Inkster (in absentia)

How to Detect, Prevent and Eradicate Fraud and Abuses in the Provincial Canadian Health-care System

The Ministry of Health (MOH) is responsible for the administration of public health care in the province. In recent years, health care fraud and abuse have received a great deal of attention both within the MOH and in the media. Although there have been numerous attempts by the MOH to quantify the annual cost of fraud and abuse in the province, it is difficult to reasonably estimate the amount of losses because fraud is an activity that is hidden. Furthermore, it is often difficult to distinguish between fraud and abuse, and errors.

In 1997, KPMG Investigation and Security Inc. (KPMG) was appointed by the Minister of Health to investigate the processes and procedures used by the MOH to detect, prevent and eradicate fraud and abuse in the health care system, and to make recommendations as a result of our investigation.

KPMG's investigation was conducted largely on the basis of interviews. We spoke with 27 individuals, including current and former employees, managers, union representatives and civil servants from the MOH. We also met with nine people from outside the MOH.

During our investigation, numerous issues were identified, including the following:

  • Ineligible consumers were obtaining health card services with borrowed, stolen, counterfeit, or fraudulently obtained health cards.

  • There are inadequate financial, technological and human resources to prevent and detect fraud and abuse, and to attempt to recover misappropriated funds.

Based on our investigation, several recommendations were made to the MOH, including the following:

  • The MOH should conduct feasibility studies and cost/benefit analyses to evaluate suggested changes in the following areas:

  • Upgrading the MOH's Information Technology, including computer hardware and software, and consider the use of smart technology (i.e., biometric cards) and point of service validation devices

  • Enabling access to multiple MPH databases

  • Increasing staffing in the MOH's Monitoring and Control Unit

  • Improving the efficiency and effectiveness of the MOH's Investigation Unit by hiring an experienced fraud investigator as a Manager of the Investigative Unit on a temporary basis to evaluate and provide recommendations in the areas of reporting, staffing and policies and procedures

  • Legislative changes should be considered in order to give the MOH the ability to audit the financial and medical records of service providers.

  • Establish a well publicized telephone hot-line that is devoted to receiving information on fraud and abuse. Ideally, this hot-line would be operated by a member of the MOH's Investigation Unit.

Contribution by Dr. Bruno Müller-Oerlinghausen

Hidden Dependencies of Medical Experts

Professor Müller's presentation centred around conflict of interests among medical experts, such as clinical investigators and their potential dependencies on commercial interests. He stated that empirical findings of clinical trials are generally objective. However, the way they are disseminated can be severely influenced and biased by the interests of pharmaceutical manufacturers sponsoring them.

Somewhat more subtle dependencies of individual medical experts, opinion leaders and medical journal editors as well as chairmen of steering committees and advisory boards, result in the defence of biased views, which serve the interest of selected manufacturers at the expense of consumers. In addition, many medical journals forward submitted manuscripts related to pharmaceuticals to the concerned manufacturers. They fear that manufacturers might otherwise withdraw their drug advertisements from the journals.

Professor Müller then described the history and the function of the Drug Commission of the German Medical Association (DCGMA) and recounted in detail how the DCGMA had to struggle in its efforts to develop and establish guidelines on the treatment of dementia. The struggle was against the "Alzo-League" an influential association of clinicians and researchers (mainly in neurology, psychiatry and psychopharmacology) which serves the interests of the pharmaceutical industry, through which its activities are sponsored.

Professor Müller concluded by suggesting steps such as awareness building, clear declaration of potential conflicts of interest, public education, etc. He emphasized that conflict of interests and the lack of awareness of such conflicts is a major problem among professionals.

Main Themes Covered

  1. Ethics and corruption in health services

  2. Dependencies of medical experts on drug manufacturers

  3. Assuring Integrity of Hospital Benefits

  4. How to detect, prevent and eradicate Fraud and Abuse in health systems

Main Conclusions

  1. Ethics and corruption in health have complex relationships and these are not recognized or appreciated by the medical profession.

  2. Medical experts, opinion leaders and journal editors depend on sponsorship by drug manufacturers and in return support views profitable for the manufacturers but harmful to consumers.

  3. Corruption and fraud in health care cost billions of dollars in industrialized countries and cause severe consequences in poor countries by diversion of scarce resources and damaging the integrity of health care personnel and institutions.

  4. There was strong support for increased research into corruption in health services in general and strengthening poor countries research capacities in particular.

docCorruption in health services: Reducing its impact on the patient (Part 1)

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