Implications of Healthcare Fraud and Abuse

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Implications of Healthcare Fraud and Abuse

Healthcare fraud and abuse cause healthcare inflation, leading to higher premiums, more costly services, and patient exposure to unnecessary risks. There are different forms of fraudulent health care, including false claims, kickbacks, misrepresentation of the services offered to patients, unbundling, duplicate claims, and unnecessary medical procedures and services. The Stark Law was implemented to curb healthcare fraud in the U.S by prohibiting medical practitioners from referring patients to medical care facilities covered by medicare and Medicaid. Toumey Healthcare System is a healthcare fraud and abuse that violates the stark law punished by law.

Toumey healthcare system was convicted for illegal billing of healthcare services. Through bribes, the medical facilities collaborated with specialist physicians to refer outpatient procedures to Toumey. Over twenty-one thousand medical bill transactions were linked to the fraudulent acts by the facility. The illegal bills were valued at $ 39 million, and over 19 specialty doctors were involved in the scandal. Leaders and management at Toumey ignored risky physician contracting and warnings from attorneys regarding the issue. The case was settled on retrial after the $45 million penalties imposed initially were invalidated by the U.S Circuit Court of Appeals. The court of appeals disputed the split of the penalty hence calling for a retrial.

The federal law prevent discourage Stark law violation through fines among other legal punishments. The jury found Toumey responsible for violating Stark law imposing legal punishment on the hospital. Toumey facilitated for a total of $24,500,00 on the final payout after the retrial penalty ruling. Eighteen specialists in the facility signed a ten year contract to conduct surgical operations at its facilities. Additionally, the hospital also agreed to compensate physicians annually including an incentive bonus. The ruling to impose penalty on the hospital was appropriate to discourage such cases of healthcare fraud.

Reference

Darby C. Allen & Dorna S. Clark. (2015). Tuomey judgment upheld in novel stark law and false claims act case. JD Supra. Web.

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