Phantom Billing, Fake Prescriptions, and the High Cost of Medicine: Health Care Fraud and What to Do about It

251 Pages·2011·1.26 MB·English

by  Terry L. Leap

PHANTOM BILLING,
FAKE PRESCRIPTIONS,
AND THE HIGH COST
OF MEDICINE
A volume in the series
The Culture and Politics of Health Care Work
edited by Suzanne Gordon and Sioban Nelson
A list of titles in this series is available at
www.cornellpress.cornell.edu
PHANTOM
BILLING, FAKE
PRESCRIPTIONS,
AND THE HIGH
COST OF
MEDICINE
Health Care Fraud and
What to Do about It
Terry L. Leap
ILR PRESS
AN IMPRINT OF
CORNELL UNIVERSITY PRESS
ITHACA AND LONDON
Copyright © 2011 by Cornell University
All rights reserved. Except for brief quotations in a review, this book, or parts
thereof, must not be reproduced in any form without permission in writing from
the publisher. For information, address Cornell University Press, Sage House,
512 East State Street, Ithaca, New York 14850.
First published 2011 by Cornell University Press
Printed in the United States of America
Library of Congress Cataloging-in-Publication Data
Leap, Terry L., 1948–
Phantom billing, fake prescriptions, and the high cost of medicine:
health care fraud and what to do about it / Terry L. Leap.
p. cm. — (The culture and politics of health care work)
Includes bibliographical references and index.
ISBN 978-0-8014-4979-6 (cloth : alk. paper)
1. Medical care—Corrupt practices—United States. 2. Fraud—United
States. I. Title. II. Series: Culture and politics of health care work.
RA395.A3L4125 2011
364.16 '3—dc22 2010041491
Cornell University Press strives to use environmentally responsible suppliers and
materials to the fullest extent possible in the publishing of its books. Such materials
include vegetable-based, low-VOC inks and acid-free papers that are recycled, to-
tally chlorine-free, or partly composed of nonwood fibers. For further information,
visit our website at www.cornellpress.cornell.edu.
Cloth printing 10 9 8 7 6 5 4 3 2 1
In memory of my father, Henry W. Leap, and my
brother-in-law, William Howard Wisner, MD

Contents
Preface ix
Acknowledgments xi
Introduction: The Big Picture 1
1. Health Care Fraud and Its Facilitating Crimes 21
2. The Major Health Care Fraud Laws 41
3. Fraud in Fee-for-Service and Managed Care: Different
Sides of the Same Coin 60
4. Fraud at Major Hospitals: Profits at Any Cost, Part One 97
5. Fraud in the Pharmaceutical, Medical Equipment, and
Supply Industries: Profits at Any Cost, Part Two 116
6. Fighting Health Care Fraud and Abuse 144
Conclusion 177
Appendix: A Note on the Major U.S. Public
Insurance Programs 183
Notes 189
References 207
Index 231

Preface
The health care systems in developed countries today employ diagnostic meth-
ods and treatment regimes that are light years ahead of the health care available
when even the youngest readers of this book were born. Medical conditions once
considered incurable or life threatening are now treated routinely, causing only
minor disruptions to the patient’s life. Bioengineering and health care in the
early part of the twenty- first century seemingly border on the miraculous.
But a dark side also exists. Fraud and abuse are pervasive elements of the vast
health care systems of advanced industrial nations such as the United States and
the European Union. A small but troublesome minority of health care provid-
ers submit bills for services they have never performed. Others provide treat-
ments that their patients do not need, and they steal hundreds of millions of
dollars from the Medicare and Medicaid programs through false billings. Still
others take kickbacks from pharmaceutical manufacturers, hospitals, and ambu-
lance companies. To make a quick buck, a few of the most nefarious health care
“professionals” are willing to place the welfare or even the lives of their patients
in jeopardy.
Health care is what criminologists call a “criminogenic industry.” This book
illustrates how the U.S. health care system provides a fertile environment for
fraud and abuse on a scale that makes it among the most serious of all white-
collar crimes.
ix