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Fraud in the Behavioral Health Industry: Causes and Solutions

Medical frauds are common, and that's no exception when it comes to behavioral health.

As the behavioral health industry has grown, so have opportunities for unscrupulous fraudsters.

In fact, the federal government has estimated that more than a billion dollars are lost to behavioral health care fraud each year. This extends beyond just health insurance claims- it's a direct issue with ethical human services. In the worst-case scenario, medical fraud can be fatal.

Because behavioral healthcare services are often provided on an outpatient basis, there is less oversight than there would be if the services were provided in a hospital setting. The nature of the services offered in this industry makes it vulnerable to fraudulent practices.

Additionally, behavioral healthcare services are frequently given by therapists who are not licensed physicians. This means that there is less regulation of the industry as a whole. Here's what you need to know about how to understand, prevent, and report fraud.

What Is Healthcare Fraud?

Healthcare fraud refers to intentional deception for monetary or unlawful gain. Individual practitioners, organizations, and private insurance programs are all capable of committing health care fraud and abuse.

Examples of Healthcare Fraud and Abuse

Healthcare fraud is not a victimless crime, and it impacts millions of people around the country. It also contributes to tens of billions of lost dollars every year. Subsequently, fraudulent claims often coincide with increased health insurance premiums, excessive and unnecessary medical procedures, and increased taxes.

In recent years, law enforcement agencies and the Federal Bureau have cracked down on fraud. Breaking these laws can be considered a federal crime. However, it still remains an ongoing issue within medical treatment settings.

Submitting false claims: Submitting claims for services that were never rendered (or submitting multiple claims for the same service). Some providers will forge or lie directly on the medical records

Bogus marketing: Convincing people to offer their health insurance number to bill for non-rendered services or steal their identity

Impersonating as a healthcare professional: Offering or billing for specific services without the appropriate license

Upcoding: Billing for a more expensive service than actually provided. This may also be known as overbilling

Engaging in unsafe medical procedures: Prescribing other procedures than medically necessary for financial gain

Unlawfully seeking patient referrals: Accepting kickbacks or other monetary benefits for services rendered

Falsifying medical records: Deliberately lying on medical records for the sake of manipulating one's health benefit plan or earning a higher payout.

Why are Medical Frauds So Commonplace?

Health insurance in America is undoubtedly complicated. Health has also become wildly political, with many people and systems also considering modern, for-profit healthcare as unethical. Some providers may justify fraud as a way of benefiting their patients or "sticking it" to the nation's health care system.

Various factors contribute to this problem, including the lack of standardization in billing and coding practices, the complexity of the reimbursement system, and the fact that many providers are not familiar with the rules and regulations governing reimbursement.

As a result, providers often submit claims for services that are not covered by the payer's policy or are medically unnecessary. In addition, some providers bill for services that were never rendered, or they upcode the level of service to receive a higher reimbursement rate.

Moreover, in the mental health industry, patients and their families are discouraged from raising concerns and reporting problems due to privacy issues, social stigmas, and the secrecy surrounding mental health. It has been estimated that 3-15% of all healthcare expenditures in the United States are related to fraud and abuse, with the behavioral healthcare industry representing a significant portion of those losses.

How To Ensure Your Company Provides Ethical Medical Services

As such cases come to light, patients, providers, payers, and students must be aware of the potential for deception and abuse. Here are some ways to combat healthcare fraud in your organization:

Incorporate Ongoing Training About National Health Care Fraud

Education about fraud should be at every level of a healthcare institution. There needs to be substantial information about issues like patient safety, malpractice, quality control, evidence-based prescription drugs, and proper billing procedures. Employers should provide ongoing training to avoid billing errors and charting inaccuracies.

Use Various Strategies to Combat Fraud Committed

Fraud and abuse can quickly spiral out of control. Employers should be using online metrics to track any suspicious behavior (i.e. offers for free treatment). If patients or their family members have concerns, address them quickly and appropriately. Everyone should be free to visit facilities regularly to ensure high-quality standards.

Examine Claims Carefully

When checking for remuneration, organizations should review the patient's records in depth to see if they accurately reflect the amount of service being billed. A clear indication of fraud is when more claims are being billed each day than there are hours in the day. This often calls for frequent, thorough investigations.

Maintain Clear Standards About Documentation

Each insurance company may have specific requests about a patient's diagnosis, treatment plan, out-of-pocket expenses, and prognosis of care. If you claim to have a comprehensive program, your documentation should reflect that without question.

Practitioners are required to keep essential records that completely disclose the nature of their services, care, and supplies provided to beneficiaries and to substantiate claims billed to comply with federal and state legislation.

Implement Predictive Analytics Programs

To identify patterns of anomalous and suspicious billing practices before submitting claims, providers should use statistics and modeling methods to forecast performance and consequences in the future while also utilizing CMS provider resources.

Prior to the submission of claims, a tool that anticipates, categorizes, and identifies likely incidents would enable institutions and physician groups to prevent accidental errors, steer clear of expensive liabilities, and place a higher priority on patient safety.

Adhere to Proper Criteria

For reimbursement, services must adhere to the regulations of their state's program, reflect medical necessity, correspond to active treatment, including patient face-to-face time, and be appropriately classified for billing.

Avoid Excess or Unnecessary Charging

Providers should never invoice undocumented treatments, charge services coded at a higher level than those actually provided, and bill unplanned, fleeting meetings between a therapist and a patient as acceptable therapy sessions.

Report Health Insurance Fraud

If you have suspected fraud occurring in your work, speak up. Complicity and inaction can be just as dangerous as committing fraud itself.

Practitioners who are aware of fraudulent activities but choose to ignore or overlook them can also be punished. So, it is best to report such activity to the authorities. Look into your department's inspector general or local health and human services department to determine the exact protocol.

Final Thoughts

At The Resurface Group, we believe in providing treatment at the highest standard of care. If you're wary of the healthcare system, we understand. We believe medical care shouldn't be complicated or confusing to navigate.

We are here to help you and your loved ones recover from mental illness and substance use. Contact us today to learn more about our services.

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