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No doubt physicians, hospitals, and home health providers are facing more scrutiny than ever from federal investigators for fraud and abuse, but what do you do if you know you have patients who are committing fraud?
Patients posing as someone else in order to reap insurance coverage for medical treatment has become so common that even a mainstream television sitcom, Friends, had a subplot involving roommates who switched identities in order to avoid paying an emergency room bill.
The issue raises many questions, such as: Do you turn the patient in? Are you liable, too, if you are aware of it? Is it worth violating the sacred physician vow of patient confidentiality to report it? Are there cases when you feel the system is flawed and the patient despite lying on a form is deserving of the medical care and is basically doing the right thing? Is it wrong no matter what?
Like most ethical questions, when you look a few layers beneath the surface, the answers aren’t always crystal clear, says Neil J. Farber, MD. Farber is an oncologist/hematologist at the Veterans Affairs Medical Center and at the Allegheny University of the Health Sciences, both in Philadelphia. He has published extensively on the ethics of patient confidentiality.
The scope of patient insurance fraud is not nearly as well-researched as that of provider fraud, but some experts believe it’s as rampant as provider-based abuse, and growing. In 1989, a survey of 86 carriers indicated that 61% of all insurance fraud was committed by patients or "undetermined" sources.1
A more precise measure might be an example provided by Minneapolis-based Blue Cross/Blue Shield of Minnesota, which recorded 27% of its fraud cases as patient-based in 1996, says Sonya Albertson, program integrity officer.
From his surveys, Farber says almost 21% of physicians encounter patient fraud. Given the 1990s’ squeeze on insurance availability for people in small business and the simultaneous rapid growth of the small business sector this patient-fraud percentage is likely to be higher now, say both Farber and Albertson.
Farber and five colleagues recently completed a study that included a survey of 1,000 physicians nationwide regarding the prevalence of patient fraud, and how physicians work through ethical decisions with that kind of knowledge about their patients.
Knowing a patient is committing insurance fraud can leave physician practices in uncomfortable ethical binds, basically over the issue of patient confidentiality vs. truthful billing, Farber points out.
If a patient discloses a fraudulent claim, should the patient’s physician disavow his or her pledge of patient confidentiality? As you might guess, the answers from Farber and colleagues’ survey of physicians include "yes," "no," and "sometimes."
To measure physician decision-making on this issue, the surveyors listed six typical scenarios of how patient fraud often occurs, and asked physicians how they would respond. (See chart describing these vignettes on p. 86.) Essentially, the six choices involved terminally ill vs. acutely ill patients, and whether or not these patients were poor, wealthy, and/or had committed previous fraud.
In brief, here are findings of the study, based on the 304 completed, usable responses to 1,000 surveys, a 30.4% response rate:
• 20.7% said physicians should report health insurance fraud in all cases;
• 14.8% said physicians should maintain confidentiality in all cases that were presented;
• 64.5% said their decision depended on a host of factors.
In general, Farber says they found that physicians are more likely to inform health insurers of fraud in cases of patients with previous fraud, increased wealth, and an acute illness, compared with a terminally ill patient with any of those characteristics.
Physicians were asked to score their willingness to report fraud as a number between 1 and 5, with 1 being definitely not to report and 5 being definitely to report. Here is how those scores averaged:
• Terminally ill patients: poor 2.8; previous fraud 3.3; wealthy 3.7.
• Acutely ill patients: poor 3.0; previous fraud 3.5; wealthy 3.9.
Scores also varied according to whether the physician had experienced patient fraud in the past, and with the type of practice. Based on the same 1-5 scoring system, here is what surveyors found:
• Physicians who had encountered patient fraud before scored their willingness to report it at 3.5, compared to 2.6 for physicians who had not.
• HMO physicians are more likely to report fraud than other doctors. Here are scoring results, based again on the 1-5 scoring system: HMOs 3.8; academic faculty 3.6; private practice 3.4; private practice and faculty practice 3.4; Veterans Affairs hospital 3.2.
Based on traditional ethics training for patient-doctor relationships, these findings are troublesome, Farber says. Here are some problems he cites:
1. Physicians’ confidentiality decisions traditionally are based on clinical reasons, not psychosocial ones. The central question generally centers around the issue of whether keeping or breaching confidentiality would cause harm to the patient or to others. For example, physicians tend to maintain patient confidentiality even in cases of serious infectious disease unless there is clear evidence of potential harm to someone else, such as a sex partner.2
In this survey, however, most physicians indicated that their moral judgments of patients would influence their decisions to breach confidentiality. "Thus, wealthy patients would be seen as more immoral than poor patients, who had committed past insurance fraud . . .," the authors wrote. "Similarly, terminally ill patients may generate more sympathy than acutely ill ones who will recover, thereby somehow influencing physicians’ judgments about whether to breach patient confidentiality."
2. Measuring whether individuals or society would be harmed by maintaining or breaching confidentiality depends on the eye of the beholder. "Poor patients may have little choice but to commit insurance fraud to obtain health care," they wrote. "If physicians were aggressive about reporting these patients, they [patients] might not receive care early enough in their illness. Breaching confidentiality in that case might cause harm to society.
"Wealthy patients, in contrast, could still go on to obtain medical care without committing fraud, even if they were reported by their physicians," they propose. That’s possibly a case in which breaching confidentiality is worth protecting society against harm.
On the other hand, isn’t ripping off an insurer harm to society? Respondents who said physicians should always report fraud may believe that the ethical obligation to protect the privacy of the individual patient is outweighed by the interests of society.
3. Physician allegiance to and/or employment by an HMO might make these physicians more likely to report patient fraud. An interesting finding in the survey is that physicians who work for HMOs are much more likely to say they would report patient fraud, Farber says. Physicians who practice in staff model HMOs, for instance, may feel more allegiance to third-party payers when the only one they work for is their sole source of income. That’s a big contrast, he points out, to physicians who are primarily fee-for-service engaged and who answer to many insurers.
In addition, physicians in an HMO setting may have a greater financial incentive to report patient fraud because their financial well-being is more directly related to the financial health of the third-party payers.
Given such a wide range of options for physicians in cases of patient fraud, they need better guidelines, Farber says, to help them arrive at the best decision.
What would Farber do in the case of patient fraud? "It really depends on the case," he says. "In the case of someone who is really destitute and desperate, I would work with the patient to get him or her care and not report the individual. As one person in my survey put it, How could I possibly report someone who doesn’t have enough food to put in their mouths?’ In the case of someone using someone else’s narcotics, that’s much different."