Fraud waste and abuse are always a big issue in the healthcare sector across the world. According to the research carried out by centers for Medicare and Medicaid services, taxpayers lose billions of dollars annually due to fraud waste and abuse. The estimated amount lost within CMS ranges between three and ten percent. The private sectors are not spared by this menace either. Private players such as self-insured companies and managed care organization are struggling in trying to find out an effective way of managing fraud waste and abuse. The effects of fraud, waste and abuse in the health sector are severe and pervasive.
As far as healthcare service provision is concerned, all participants share the cost. The medical providers, patients, plan sponsors and insurance companies lose billions of money. The underinsured and uninsured consumers are exposed to severed health risks in case they cannot afford to pay for proper medication. According to pharmaceutical care management association, fraud, waste and abuse lead to more than 1% of the cost of prescription drugs. The cost is large when the entire healthcare system is considered.
Fraud in Pharmaceutical Company, Medical Device Company, Health Provider
Fraud in the healthcare providing context is defined as an intentional concealment or deception of medical information for monetary gain. A good example is where medical practitioners bills for services that have not been provided. Alternatively, the nature of the services can be misrepresented with the intention of getting overpaid.
The insurance companies can also become victims to this fraud. A good example is where the insurance company compensates someone who took and insurance cover by providing falsified information. I will give the case to illustrate this kind of fraud.
In the case of pharmaceutical companies, pharmacies can engage in drug switching. It is a situation where payment higher-cost drugs are submitted yet lower-cost drugs are dispensed. In other situations, pharmacist who do not practice professional ethic bills insurers for prescriptions that are phantom and receives payment for unfilled prescription. The diversion of narcotic drugs to the black market is also another prevalent fraud in the pharmaceutical industry. Another fraudulent engagement includes drug price inflation, justifying unwarranted tests and prescription by falsifying the medical condition of the patient and billing for expensive medicals services which were not provided.
The medical device fraud begins at the manufacturer. The three major manufacturer’s fraudulent activities are the provision of financial inducement or kickbacks, off label marketing and failure to report adverse occasions. Off level marketing entails the failure of the manufacturer to report and alteration to the labeling, manufacture or design of the medical equipments or devices. The adverse occasions involve concealing the outcomes and recommendations of investigations that are carried out internally in the clinic. The investigations relate to safely and effectiveness impacts of medical devices and equipments.
On the other hand, the pressure that the sales representative and company employee are subjected to in terms of service delivery often leads to compromise of the quality of services they provide. Failure to give a report of any adverse event as per the laws is considered a breach to false claim act. In addition, the manufacturers can fail to meet the good manufacturing practices.
The most prevalent medical device fraud occurs when the physicians and the companies engage in various kickback schemes. Such engagement includes situation where physician takes double standard work by being consultants in the process of designing, developing and testing medical devices.
Waste in Pharmaceutical Company, Medical Device Company, Health Provider
The most prevalent waste in the pharmaceutical company is a waste relating to drug prescription. When the drugs that have been prescribed are not taken properly or are not administered. Sometime the patient fails to collect the prescribed drugs or stop taking them for one reason, or another. Some contributing factors are negligence, side effects or cost.
In other situations, the use of a particular drug can be ban and the manufacture has to dispose of the already manufactured package. In addition, some medical practitioners make can make an error by prescribing ineffective drugs or rule out the use of generic drugs are affordable and serve the same purpose as the original drugs. Drug distribution can also bring about waste. For instance, beauriocratic logistics involved in the distribution of drugs and patients not, adhering to taking prescribed drugs.
Manufacturing and distribution of substandard medical devices and equipment is the greatest waste in the sector. It is indisputable that the human life is a very critical thing which requires nothing less that perfection in every Endeavour. The management of a hospital cannot accept to purchase any medical device which does not conform to the required standards. In a situation where manufacture supplies devices which are substandard, the hospital will reject rendering the whole process of manufacturing and distribution useless.
An example of a waste in healthcare service provision is when the patient pays for medical services that were not provided. It is a waste on the side of the patient. The hospital can incur a waste when they pay for drugs or equipments which are substandard. In addition, some medical practitioners have their personal clinic at the same time. It in result to conflict of interest and they end up spending more time in their clinic rather than in the government hospital. The hospital incurs waste since they pay for physician’s services which were not offered.
Abuse in Pharmaceutical Company, Medical Device Company, Health Provider
Abuse in the health provides is associated with waste. Though some situations are not intentional, it always occurs has a result of negligence. The most prevalent abuse of profession and privileges by medical practitioners are motivated by the need for financial gains. An example is a situation where the employees in the billing department collude with the patients to defraud the health service provider. For instance, a patient who owes the hospital $1000 can evade this payment if the billing personnel decide to ignore the professional ethics governing the medical sector. This kind of waste is very prominent in hospital that has not implemented a robust healthcare management information system which links all the data in a different department in the hospital. In addition, the medical practitioner can defraud the institution my administering some treatment to a patient and failing to keep records for billing services (Hyman and David 234).
For the case of device manufacturing abuse occurs due the pressure that the sales representative and company employee are subjected to in terms of service delivery often leads to compromise of the quality of services they provide. Failure to give a report of any adverse event as per the laws is considered a breach to false claim act. In addition, the manufacturers can fail to meet the good manufacturing practices.
The effects of waste fraud and abuse in the health system and consumer are adverse. According to Berwick and Donald (1514), the cost of waste related to pharmacy in 2011 exceeded $400 billion. It is the money invested which brought no return. It is the responsibility of PBMs to keep on watching the spending that are channeled towards activities which will result to fraud, waste and abuse.
Berwick, Donald M., and Andrew D. Hackbarth. "Eliminating waste in US health care." Jama 307.14 (2012): 1513-1516.
Hyman, David A. "Health care fraud and abuse: market change, social norms, and the trust “reposed in the workmen”." The Journal of legal studies 30.S2 (2001): 531-567.
Davies, Sharon L., and Timothy Stoltzfus Jost. "Managed care: placebo or wonder drug for health care fraud and abuse." Ga. L. Rev. 31 (1996): 373.