Annals of Long Term Care

**sub**Investigation of Health Care Fraud Among Long-Term Care Practitioners **endsub**
Stuart Silver, a Supervisory Special Agent of the FBI, Atlanta, GA, who heads a squad of agents investigating health care fraud in Atlanta and monitors all health care fraud activity in the state of Georgia, began his presentation by quoting a startling figure of $100 billion as an estimate of the sum that is lost to health care fraud each year. He explained that this figure is obtained by calculating 10% of annual health expenditure in the country. While health expenditure is now at approximately $1.35 billion, it is expected to rise to over $2 billion in just five years. This explains why in 1992, Janet Reno, who then held the position of Attorney General, made the investigation of health care fraud the top priority in FBI investigations.

How are these investigations financed? Forty-five percent comes from government-sponsored programs and 55% comes from private payers, who would be considered victims of health care fraud. “But really,” noted Mr. Silver, “the victims are everyone in the United States because either you pay in added taxes, or in extra insurance premiums, or you suffer in terms of benefits that are reduced due to money that had been lost to fraud.”

The FBI has approximately 12,000 agents in 56 field offices throughout the world, and 4% of these professionals are dedicated to the investigation of health care fraud, “which is really a lot” according to Mr. Silver. He mentioned that, in spite of the organization’s newly increased emphasis on countermeasures against terrorism post 9/11, prosecuting health care fraud remains an important program. According to Mr. Silver, the agency’s success at these investigations can be measured by the number of resulting indictments, which was at about 750 in the year 2000. “That means that on every given federal work day, there are three people being indicted for health care fraud,” said Mr. Silver.  

To explain the prevalence of fraud, the presenter observed that individuals who were previously involved with various criminal enterprises, such as drug trafficking, often move into health care fraud. The speaker outlined four reasons for the transition: there is more money to be gained in health care fraud; there is a smaller likelihood of getting caught and prosecuted by the authorities; in the event of being convicted, the sentences are more benign; and the operations themselves involve a smaller degree of risk.

According to Mr. Silver, there is a small and select number of individuals who are committing fraud within each provider community. These communities are: physicians’ practices, hospitals, ambulance services, home health care, clinics, pharmacies, durable medical equipment (DME), laboratories, and mental health care. Mr. Silver focused his presentation on the first three.

Physician Fraud
Among the different types of physician fraud, such as the classic billing for services not rendered, false upcoding, billing for medically unnecessary procedures, and kickbacks for referrals, the speaker focused on the former. “Our concern,” stated Mr. Silver, “is that room rental payments may be disguised kickbacks to the physician landlord to induce referrals.” He made it clear that federal law prohibits knowingly and willfully soliciting, receiving, or paying anything of value to induce referrals of items or services payable by a federal health care program. In addition, both parties in a kickback are held legally accountable. The speaker recommended the following website, http://oig.hhs.gov/ fraud/docs/alertsandbulletins/ office%20space.htm, for additional information on kickbacks that includes a list of rental arrangements that would be classified as “suspect” by the FBI. In summary, there should not be any link between the number of patients one refers and the amount of rent that this individual collects.