Fraud and Corruption in the Healthcare Sector in the United States
There are numerous opportunities to commit fraud and corruption in government entitlement programs in the United States such as Medicare, social security, and unemployment benefit programs because of the complexity of these programs. State, federal, and l
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oduction: Fraud There are several definitions of fraud that fit into the context of this chapter. The Legal Dictionary (2017, p. 1) defines fraud as “A false representation of a matter of fact-whether by words or by conduct, by false or misleading allegations, by concealment of what should have been disclosed-that deceives and is intended to deceive another so that the individual will act upon it to her or his legal injury.” Learn About the Law (2017, p. 1) states, “Fraud is a broad term that refers to a variety of offenses involving dishonesty or ‘fraudulent ‘acts. In essence, fraud is the intentional deception of a person or entity by another made for monetary or personal gain.” The Legal Dictionary (2017, p. 1) notes that there are five separate elements that must be proven in the prosecution of a person charged with fraud. These are: • • • • •
A false statement of a material fact Knowledge on the part of the defendant that the statement is untrue Intent on the part of the defendant to deceive the alleged victim Justifiable reliance by the alleged victim on the statement Injury to the alleged victim as a result
The criminal code of the United States, as well as the codes of all of the individual states, has specific laws defining fraud as a criminal act. The type of offenses, the severity of the offenses, as well as the punishments for the conviction of fraudulent offenses will vary. For example, the fraudulent registration of aliens is punished as a misdemeanor under federal law. The Centers for Disease Control and Prevention (CDC) (2017, p. 1) reported that, “Health care fraud perpetrators steal billions of dollars each year from Federal and State governments, from American taxpayers, and some of our country’s most vulnerable citizens. Fraud drives up the cost for P. C. Kratcoski (*) Department of Sociology and Justice Studies, Kent State University, Kent, OH, USA e-mail: [email protected] © Springer International Publishing AG, part of Springer Nature 2018 P. C. Kratcoski, M. Edelbacher (eds.), Fraud and Corruption, https://doi.org/10.1007/978-3-319-92333-8_6
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everyone in the health care system, in addition to hurting the long term solvency of the Federal health care programs, like Medicare and Medicaid, upon which millions of Americans depend.” After an examination of fraud in the healthcare industry, the Association of Certified Fraud Examiners (2017, p. 1) concluded, “Essentially fraud in health care is just like in any other industry. Fraudsters with the means and opportunity take full advantage to unjustly profit. Health care crooks inside and outside the industry include patients, payers, employers, vendors, and suppliers, and providers, including pharmacists. Organized crime rings and computer hackers also play roles in committing health care fraud.” Several examples of cases of healthcare fraud are given in Box 1 to illustrate the various types involved in healthcare fraud. Box 1 Healthcare Fraud Healthcare Medical Treatment Provider Bolingbrook doctor charged with dispens
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