Elimination of Fraud and Abuse in Health Care - Part 3

Waste, fraud and abuse in healthcare stops customers to have economical health facilities and it ultimately results in decline of quality as well. The United States of America's one of the biggest challenge is to come up with the strategy and ideas which help people having health facilities with quality, coverage and most importantly economical. It is explained in "Elimination of fraud and abuse in health care "part 2 that the customers dealing with healthcare is out of their reach each year and their pockets do not allow them to have quality and economical health. President Obama is appreciating and welcoming "ideas which can cut the cost, bring quality, reduce waste, fraud and abuse, last but not the least gives customer choice in healthcare.

One of the focal points is to bring innovation in healthcare and develop a system which can bring the mentioned constraints in healthcare. For that matter there is a need to take a look in what the Obama's healthcare reform plan is?

Barack Obama's Health Care Reform Plan

President Obama envisions the healthcare system so perfect that not even a single American suffers from healthcare. He puts emphasis on the reforms and his plan estimated cost is around $50 to $65 billion. The key factors of Obama's interest are:

1. Quality, Affordable & Portable Health Coverage for All.

2. Modernizing The U.S. Health Care System To Lower Costs & Improve Quality

3. Promoting Prevention & Strengthening Public Health.

One of the core aspect of this plan is the claim that every family will save approximately $2,500 each year. The plan caters a Health information technology investment aimed at dropping needless expenses that result from avoidable errors and ineffective paper billing systems. It will also help preventing and organizing of persistent circumstances. The preparation is required to raise insurance industry competition and reduce underwriting costs and profits in order to decrease insurance overhead. The health insurance should be universal which will diminish spending on uncompensated care.

The critics say that there is cost shift rather than cost reduction in this plan. Obama's stresses over creating another program just like Medicare or under- 65 age is itself a costly thinking. He also wants to empower government programs Medicaid and SCHIP. Obama makes investments in health information technology a significant element of his cost control strategy. This is the point of discussion. The only way to cope up with all these issues is to significantly use the technology. In order to improve quality Obama has planned to take steps which can produce results. It includes disease management programs, coordinated care, transparency about cost and quality of care, improved patient safety, aligning incentives for excellence, comparative effectiveness reviews, and reducing disparities in health care treatments for the same illness.

The three essential points to reduce inefficiency and abuse and improve healthcare quality are:

o Adopting state-of-the-art health information technology system.

o Ensuring that patients receive and providers deliver the best possible care, including prevention and chronic disease management services.

o Reforming the market structure to increase competition; and offering federal reinsurance to employers to help ensure that unexpected or catastrophic illnesses do not make health insurance unaffordable or out of reach for businesses and their employees.

The 3rd point of the Obama's plan is to Promote Prevention & Strengthening Public Health. For that matter he thinks, employers, school systems the medical and public health workforce, and federal and state and local governments have to play their role. The employers have o offer onsite clinical preventive services such as flu vaccinations, hygienic food in cafeterias etc. the workshops,seminars and training programs should be held in schools in order to educate children. Finally the government has to effectively use the electronic and print media and other ways to create awareness among people.

Problem Area

The healthcare costs are escalating and the health insurance have gone up too in the last few years, almost doubled with mounting 3.7 times faster in comparison to the salaries of employees. About 100,000 Americans die from medical errors in hospitals every year1. The personal bankruptcies are greater than ever due to lack of affordable health. Over 45 million Americans, including over 8 million children not having health insurance. 80% of the working families are uninsured. Intensifying health care costs are making it extremely intricate for employers, particularly small businesses, to endow with health insurance to their workers.

The basic problem is that until or unless a plan is not executed, things will not be changed. They will remain static. The claim that every American family will save $2,500 will be a dream, if there is no proper strategy and its implementation. There has to be a pro active procedure to fight with these issues. The nucleus of the strategy is to eliminate waste, fraud and abuse in healthcare. As it is discussed before that there are a lot of statements and thirst for the enhanced healthcare system but nobody talks about the central point. By just saying "reforming the market structure" or "Adopting state-of-the-art health information technology system" and "Ensuring that patients receive and providers deliver the best possible care" the healthcare system would not improve. One has to come up with the practical approach and a "system" which can actually deal with these problems.

Steps to be taken to avoid fraud and abuse

The "system" has to be flawless in order to achieve what is promised. The Americans are going through a difficult phase of recession. It is the prime responsibility of the state to deliver what is pledged. There are some vital steps to be taken to ensure the paramount quality.

- Any one who is involved in care providers, the flow of information has to be accurate.

- This is absolutely vital to encounter Date Reporting System in place which can accumulate or transfer such information that can reduce the fraud and abuse.

- The existing encounter Data Reporting Systems are creating insufficient information to provide any means for the reduction of potential fraud and abuse.

- There is a strong need of making enhancements or addendum to the existing ERRS.

The very first problem occurs when the measurements taken to avoid fraud and abuse are considered to be satisfactory. The CMS has a lot more potential to recover as they are recovering currently. It is discussed thoroughly that what is fraud and abuse? And how it occurs? A unanimous plan of the strategy builders is to have precautionary measures to avoid fraud and abuse. When the fraud and abuse actually takes place then the need of identification is required. It is considered that the identification of improper payments is reasonable. Here is the problem; the CMS (Centers of Medicare and Medicaid services) came up with RACs (Recovery Audit Contractors) and they were able to identify only 0.3 percent ($ 1.03 billion) of the claims received whereas the total of $317 billion Medicare claim payments available for review. Just because the amount of recovery is high RACs are considered to be satisfactory but the percentage o recovery is extremely near to the ground.

References

1. Linda T. Kohn, Janet M. Corrigan, and Molla S. Donaldson, Editors; Committee on Quality of Health Care in America, Institute of Medicine (2000). To Err is Human. Washington, DC: National Academy Press.

Social Security - Part-1 - The Trust Fund is a Fraud

In the late 1930's the U.S. Congress established a Social Security Fund to provide for aging and disabled workers, through the Federal Insurance Contributions Act (FICA). This fund is a payroll tax, which today is just under 7.65% of your wage, and it currently supports both Social Security and Medicare (Social Security is 6.2% and Medicare is 1.45%); employers must also pay just under 7.65% of your wage to match your contribution. Your monthly Social Security check will be calculated relative to your age when you retire and the amount deducted from your wages during your working years. Even though the amount anyone will receive is figured according to their contributions in the past, every Social Security check comes from the weekly and monthly payroll deductions taken from wages and matching money paid by employers in the present. This amount is just over 15% of the gross wages of almost all workers, up to a wage cap of about $88,000 annually (the Medicare portion is deducted to a higher cap). This is a little less than one-sixth of all wage income. If many are working, then one-sixth of that labor may pay higher benefits and take care of the elderly and disabled adequately; if few are working, then benefits will have to be reduced and many of the elderly without other income may live in privation. Obviously the ability for Social Security to pay benefits depends on the ability of our economy to produce income.

By law, any surplus FICA tax collected by the Social Security Administration is transferred to the U.S. Treasury Department and exchanged for government bonds. The accumulation of these Treasury Bonds is what the government calls our Social Security Trust Fund. This fund, however, is a complete fraud, because the Treasury Department does not invest this money in any manner that preserves it, or require that the government departments receiving it must pay it back in the future. Like all taxes, it is spent as part of the annual Federal Budget and gone forever. It makes no sense to even talk about repayment. Even though these bonds do earn interest annually (additional Treasury Bonds), the interest is a fraud also; these bonds, both principle and interest, do not represent a fund, nor is the administration of this fund a trust, as any dictionary will attest. This bogus fund is just an IOU from Americans to Americans.

In the Reagan, Bush-1 and Clinton years, the Congress and the President attempted to balance the national budget (after the Reagan tax cuts of the early 1980's) by raising FICA taxes beyond what was needed to fund Social Security. The government then took by statute (Borrowed!) these excess dollars to help fund our other government expenses: Housing, Education, Defense, etc. But these excess dollars are spent, and the bonds, along with the interest due, are just promises by government to raise the Income Tax in the future when these bonds are due. For the Social Security Administration to hold bonds, redeemable only by the authority of the U.S. Congress to raise the Income Tax to pay off those bonds, and to call those bonds a Trust Fund, is ludicrous and a fraud. The Social Security Administration would have you believe that it will cost taxpayers less to fund Social Security obligations in the future when these bonds are mature and redeemable. It is truly amazing that people this stupid can be given positions of importance and trust in government.

The idea that the Social Security Administration and the Treasury Department are independent entities with legal standing like citizens or corporations is bogus. The Federal government in its entirety has legal standing, but its parts are not similarly independent. The illusion of separation and independence between the SSA and the Treasury is maintained because the FICA tax is a regressive income tax, hitting the working poor harder than the wealthy. The Social Security tax was instituted 25 years after the Income Tax was established by Congress; it would have been simpler in 1938 to raise the Income Tax on everyone to fund Social Security, but then the wealthy would have objected to paying their fair share, so the politicians bowed to the demands of wealth and we are dealing with the continuing misfeasance of our tax structure today. If our society were just now developing a tax structure to pay our collective bills, Social Security would get its funding from the general Income Tax just as The Defense Dept., Education Dept., Health and Human Services, etc.; because we would require that structure to be fair, by being equitable, in how taxes are raised; and fiscally responsible by taxing our productivity to avoid any kind of debt or phony financing scheme.

When the government sells a bond to any citizen, business, or foreign entity, it is obligated to payoff that bond when due, even if that requires reducing other expenditures, including Social Security, or raising taxes; because government must pay its debts first and foremost. We often hear the term "full faith and credit of the government" with regard to guaranteeing the payment of government debt; without which the government could not entice anyone to lend to it. But the "full faith and credit of government" is irrelevant with regard to the Social Security Trust Fund, because when we the people both own and owe a debt, that debt does not exist; so neither government faith nor credit are applicable in dealing with this issue. It is a mistake for the Treasury Department to issue Treasury Bonds to the Social Security Administration in exchange for surplus Social Security Tax, because it confuses everyone into believing that they are real obligations for payment by the government and the taxpayers that support the government; BUT THEY ARE NOT!

The Social Security Administration has monthly demands on its cash flow, and when its income is projected to be less than its outflow, Congress will need to raise taxes (in one form or another), or reduce benefits to recipients, to keep the Social Security Administration books balanced. It simply does not matter whether Congress raises taxes and that income is given directly to the SSA to meet its obligations, or Congress raises taxes to payoff government bonds held by the SSA, and those proceeds used to fund Social Security. In either case taxes are raised the same amount to cover the cost of maintaining the Social Security system. The Trust Fund bonds themselves are baloney, because they have zero value and liability to we the people.

It should be obvious to all that courts will give trial to cases of debt between different persons, corporations, and countries; but they would not hear a case where a person, corporation, or country was suing itself to collect a debt owed to itself. If the SSA had used its annual surplus to purchase industrial bonds in U.S. companies or government bonds of foreign countries, it would have legal standing to have a court enforce repayment of its investments plus interest, such that the profits of those companies or the taxes of foreign countries could be used by the SSA to support our elderly. Such is not the case with the Social Security Trust Fund. The American people cannot sue the American people to force payment of a debt they owe to themselves. We will either tax ourselves to meet the contemporary needs of Social Security or we will reduce benefits to the level that we can afford.

Consider a village moron going about his daily life, being given menial tasks by several businesses so that he may have a supporting income. The particular act that determines that this person is a moron is that when he spends his wages he writes himself an IOU for the money spent. If our village moron decided to retire and cash-in his IOU's at some bank, what bank would loan him money wherein he was both the creditor and debtor associated with his IOU's? You simply cannot be in debt to yourself.

Amazingly enough the American people have a government that is operating in this moronic manner. The U.S. Treasury is the part of the moron that spent the money to support us, while handing out IOU's, and the Social Security Administration is the part of the moron that holds some of those IOU's, and thinks they are collateral for which the citizenry may redeem for future income. This part of the moron even accepts additional IOU's as interest on the IOU's that are non-existent spent money. The working citizenry are the bank (taxable income) to which the Treasury and Social Security Administration want to come and cash-in those IOU's in the future.

The United States Government cannot buy its own debt in any form, in any department or agency, and profit by, or receive income from such an action. Government does not invest in corporate stocks and bonds, or own industries to produce profits from goods sold to consumers. It taxes the productivity of commerce and spends those taxes yearly. There is not one penny of money in our so-called Social Security Trust Fund; we may only tax the productivity of the present; and the productivity of the future, when and only when it becomes the present.

The national budget was balanced for the first time in a generation in 1998. In fact, it produced a 70-billion dollar surplus; and 1999, 2000, 2001 had larger surpluses. The surplus dollars sent to the Treasury by the Social security Administration and used by the Treasury to pay our general expenses, amounts to another Income Tax; it is in no way an investment that can be redeemed to cover any future need. These budget surpluses are not all from Income Tax; they are mostly from the Social Security Tax, because workers have been overcharged for Social Security for nearly 20 years to balance Federal Budgets; not to build a trust fund.

It is impossible to protect future Social Security requirements with today's FICA surplus. We can only supply ourselves with more goods and services today, or reduce the taxes to be collected next year, or pay off a tiny portion of the principle on the National Debt. There is no difference in income to government, regardless of its name; Income Tax, Social Security Tax, Medicare Tax, Excise Taxes, Usage Fees for national parks, Import Duties, etc.; all are levied by government to provide income, and spent by government in annual budgets. Government does not tax the past or future and government does not save or invest for the past or future, only the present.

If it truly makes sense to over tax people to support one portion of government and give them an IOU that could be redeemed at a profit in the future, then why not change all of our Income Tax, Capital Gains Tax, etc. into FICA Tax? Such that the Treasury Department could borrow all of our government spending requirements from the Social Security Administration and issue many more bonds from which we would presumably become an unbelievably wealthy country as those bonds mature. We can all turn into morons and live off the interest, without disturbing the principle. Whether the government establishes two types of taxes to fund itself or ten types of taxes is irrelevant; if one or more tax streams take in more than they require, their tax rate is too high; and if one or more tax streams takes in less than it requires, their tax rate is too low. The moving of tax receipts from areas of excess to areas of deficit is internal bookkeeping, not an investment. Excess funds that are spent instead of being refunded are gone and irretrievable.

In our current economy the baby-boomers are moving into their most productive and profitable work years, a relatively large group of taxpayers paying relatively larger amounts of Social Security tax, as well as Income Tax. The current senior citizens are enjoying relative affluence in their standard of living. But a few years from now when the baby-boomers are retiring and swelling the ranks of the non-working, there will necessarily be a higher tax burden to support those retirees. The money that will be available to fund Social Security will depend totally on the ability of future workers to pay taxes to government. And the bonds piling up in the so-called Social Security Trust Fund are void and worthless. If tax income cannot be increased, there is absolutely nothing that government can do to change what is coming except raise the age of retirement and lower the amount of benefits to be paid, to match the amount of tax that can be taken from those who labor in our economy.

In 2005 the President and some members of Congress were proposing to "save" what is not yet in peril (it cannot be broke if it presently produces a surplus). Any truly surplus money will remain quietly in the government's accounts. It will simply be a reserve to defraud the taxpayers of the truth about the full extent of our deficit spending, while the Social Security Administration receives more worthless bonds (IOU's) in their fraudulent electronic trust fund.

© March 2009

Craig D. Hanks

This article is taken from a chapter of my book SOCIAL BENCHMARKS. Other excerpts can be viewed at http://beyondfarenough.blogspot.com/.

Criminal Defense Lawyer Files: How To Be Familiar With Insurance Fraud

Fraud happens any time someone purposefully lies to obtain some benefit or advantage to which they are not otherwise eligible or a person knowingly denies some gain that is due and to which someone is entitled. With regards to the particular issues involved, an alleged wrongful act may be treated as an administrative action by the Section or the Scam Division could handle it as a criminal matter. California and federal laws additionally permit the Fraud Division to go after its cases federally. In these occasions, the crime of "insurance scam" is generally pursued as "mail fraud," "felony racketeering" or other federal crimes.

The bad economy is producing a bumper crop of cash-strapped consumers, business owners and shady brokers who are encouraging a wave of insurance fraud that's keeping government bodies and law enforcement officials busy from coast to coast. Whether it's worthless health programs peddled via fax, staged auto accidents, arson or slip-and-fall incidents in the local mall, insurance scam of all types is booming in the economic downturn and consumers are paying the price in higher monthly premiums. To keep this in perspective, roughly forty eight million insurance statements are prepared every year within the U.S. and less than one-quarter of one % are referred to the nonprofit National Insurance Crime Bureau for exploration of probable fraud.

Watch out - insurance crooks are picking your wallet in order to line their own. These thieves are committing insurance scam, one of the country's largest criminal industries. Insurance fraudulence is a crime, and one way or another, honest consumers and organizations pay the price. One example is medical health insurance fraud. With this type of fraud' false or deceptive information is provided to a health insurance organization so as to have them pay out unauthorized benefits to the policy holder' another party' or the organization offering services. The offense can be committed by the covered individual or the supplier of health companies.

Fraud may be committed at different points within the insurance deal by various parties: applicants for insurance coverage, customers, third-party claimants as well as experts who offer services to claimants. Common frauds include "padding," or inflating actual claims; misrepresenting details on an insurance application; submitting claims for injuries or damage that never occurred; and "staging" accidents. Is it possible that a single motivation for insurance scam is to get back at insurance companies that provide poor service? Based on the survey results, fifty five % of American consumers say poor service coming from an insurance company is more prone to cause a person to commit deception against the company.

The "chief motive in all insurance crimes is financial profit." Insurance contracts provide the insured and the insurer with opportunities for exploitation. One reason that this particular opportunity arises is in the case of excessive-insurance, when the amount covered is greater than the actual valuation of the property covered. This problem could be very difficult to avoid, specifically since an insurance provider might occasionally promote it to be able to obtain greater earnings. This allows fraudsters to make profits by destroying their property since the payment they will get from their insurance companies is of greater value as opposed to the property they destroy.

Criminal defense lawyer from Rollins Law Group responds to nearly every customer's condition for trial run, rather then rushing to accept a plea bargain. A California criminal defense lawyer is extraordinarily crucial since these are comfortable with agreeing to the hardest and demanding cases. Log on to rollinslawgroup.com and for a free consultation call at 1-800-756-9002.

Burning Down the House - States Struggle to Turn Up the Heat on Insurance Fraud

Drastic times call for drastic measures. Among those bashed by the lingering U.S. economic downturn, homeowners, insurance brokers and motorists alike are turning more and to insurance crimes for a personal bail-out. But state fraud investigators, suffering stiffer budgets are facing equally drastic cuts in resources to fight the fraud.

According to study partially funded by the nation's largest insurance companies --- fraud fighting bureaus are seeing a significant spike in cases.

"The troubled economic climate confronts many fraud investigators with the severest challenge they've faced in years. But a positive outcome could be greater efficiency in combating schemes as fraud bureaus find better ways to fight crime with the resources they do have," says Dennis Jay, the coalition's executive director.

Surprisingly, agents and brokerages are considered the biggest offenders, accounting for the most instances of insurance fraud in the past year. Seven of 10 fraud bureaus report a spike in agent cases, according to the coalition. Nearly 40 percent of fraud bureaus say their producer caseload was much higher. The survey of 37 state fraud bureau directors was conducted last October.

After insurance agents, anxious drivers continued ditching unwanted vehicles for insurance payouts in one of the defining fraud trends of the troubled economy. Seven of 10 fraud bureaus report more vehicle abandonment and vandalism cases, the coalition's survey shows.

More homeowners literally are burning up for insurance payouts as well. Nearly two thirds of fraud bureaus report increased home arson cases. This uptick is generally isolated to regional or local hotspots, the coalition's survey notes.

Business owners struggling to stay afloat are resorting to insurance-related crimes with 60 percent of state fraud bureaus reporting bogus liability claims. "Reports of increases in slip-and-fall claims from insurers and self-insurers-especially grocers, department stores and restaurants-began surfacing in early 2009 and seem to have continued," the coalition's survey says.

Bogus health plans are spreading rapidly around the U.S. as well, taking advantage of the large market of uninsured Americans. Most fraud bureaus report a spike in fake health plans, with nearly 40 percent saying their caseload was much higher due to health insurance misrepresentation.

Prescription drug abusers also are on the loose. More than 60 percent of fraud bureaus report more cases involving diversion of painkillers and other addictive prescription drugs such as painkillers. Drug diversion has spread with alarming speed around the U.S. in recent years, with insurers paying billions of dollars for illicit prescriptions.

Many fraud bureaus are being forced to manage this spreading crime trend with smaller budgets and staff, the coalition's survey reveals.

Some 63 percent of fraud investigators report lower budgets for 2009. "This is somewhat surprising, given that a majority of the fraud bureaus were created with dedicated funding, specifically assessments on insurers," the survey notes.

Nearly a quarter of state fraud teams also lost staff positions this year, and a third of these agencies were forced to leave vacant positions unfilled.

To most people, health insurance is a card with numbers you take to the doctor's office and a little booklet of paper that lives in your filing cabinet, closet or dusty corner of your home. To McKinley, health insurance and the historical reforms that go along with the inequality of healthcare in America are topics of healthy discussion, worthy of further study and catalysts for education and action.

McKinley moved to South Florida after directing corporate communications and marketing strategy for several FORTUNE 500 companies and public relations agencies. A founder of Communicatia, Ink (an independent communications company he founded while working as a business reporter and newscaster in Nashville), McKinely is an emerging subject matter expert on health insurance and regulatory issues.