Economics of Medical Fraud

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Healthcare Leads the Pack

[By Staff Reporters]mardi-gra-skulls

All Medical Executive-Post readers and subscribers are aware of the Federal False Claims Act. Since 1986, False Claims Act [FCA] judgments and settlements totaled over $20 billion dollars. 

Of Miscreants and Feasors

According to outside unverified resources, below are the top 20 alleged FCA recoveries to date. Notice that all twenty, of the top 20, are healthcare and big Pharma related.

The Top 20

  1. Tenet Heath Care – $900,000,000
  2. HCA – $731,400,000
  3. Merck – $650,000
  4. HCA – $631,000,000
  5. Serono – $567,000,000
  6. Taketa Abbott Pharmaceutical Products Inc – $559,483,560
  7. Schering Plough – $255,000,000
  8. Abbott Labs – $400,000,000
  9. Fresenius Medical Care (National Medical Care) – $385,000,000
  10. Cephalon – $375,000,000
  11. Bristol Myers Squib – $328,000,000
  12. SmithKline Beecham [DBA] GlaxoSmith Kline – $325,000,000
  13. HealthSouth – $325,000,000
  14. National Medical Enterprises – $324,200,000
  15. Gambro Healthcare – $310,000,000
  16. Schering-Plough – $292,969,482
  17. AstraZeneca Pharmaceuticals – $266,127,844
  18. St. Barnabas Hospitals – $265,000,000
  19. Bayer Corporation – $257,200,000
  20. Schering Plough – $255,000,000

More: You can read all the details regarding these fraud judgments & settlements here 


The above are the very companies that doctors, patients and many stakeholders rely upon. They bombard us every hour with TV advertisements and information on the latest drugs and newest procedures. They often promote cures for the exaggerated illnesses and nebulous ailments they seek to treat. Is this expense model just business-as-usual; or the cost-of-doing business?


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8 Responses

  1. Hard Drives and Subpoenaes

    The hard-drive or solid state drive [SSD] of a PC or MAC can be subpoenaed as part of the malpractice, or fraud discovery process and legal proceedings. The malpractice situation is civil, but fraud allegations may be criminal and the FBI may also get involved. And, many doctors are not aware that every deletion or addition to a computer leaves a time stamp stored in a covert hidden file.

    Companies like SunBlock Systems of McLean, VA specialize in this type of examination and data recovery.



  2. According to one new study:

    * Unnecessary care (40 percent of healthcare waste, or $250 billion to $325 billion), defined as over-use of antibiotics and diagnostic lab tests to protect against malpractice exposure

    * Fraud (19 percent of healthcare waste, or $125 billion to $175 billion), which covers everything from fraudulent Medicare claims to kickbacks for referrals of unnecessary services.

    * Administrative inefficiency (17 percent of healthcare waste, or $100 billion to $150 billion), focused on excess paperwork.

    * Healthcare provider errors (12 percent of healthcare waste, or $75 billion to $100 billion), defined as medical mistakes.

    * Preventable conditions (6 percent of healthcare waste, or $25 billion to $50 billion), focused on hospitalizations to treat uncontrolled chronic conditions such as diabetes, which is less costly to treat when the chronic condition is properly managed through timely access to outpatient care.

    * Lack of care coordination (6 percent of healthcare waste, or $25 billion to $50 billion), focused on inefficient communication between healthcare providers, leading to limited access to needed medical records and a resulting duplication of tests or inappropriate treatments.



  3. Nice post and f/u comments.

    Now, here is a scary NYT article on cancer advertisements from hospitals.



  4. Anthem Blue Cross faces charge of violating ‘Any Willing Provider’ law

    A California doctor has sued Anthem Blue Cross, alleging it violated the “Any Willing Provider” law when it denied his application to become a part of Anthem’s provider network.



  5. AZ Podiatrist Ordered to Pay Government $175K for Medicare Fraud

    Kent L. Peterson, DPM, a podiatrist practicing in Prescott, AZ has agreed to pay the federal government $175,000 to resolve allegations that he violated the federal False Claims Act by submitting false bills to Medicare. The settlement agreement resolves allegations that Dr. Peterson and his podiatry practice, Prescott Foot and Ankle Clinic, falsely billed Medicare for incision and drainage procedures that were not performed.

    Source: Manny Tarango, Prescott News [12/22/10]


  6. The Society for Cardiac Angiography and Interventions got more than half its income in 2009 from medical device and pharmaceutical makers. This week, a study in JAMA questioned why more patients who received angioplasty and stents didn’t first receive recommended medications.



  7. In shift, feds target top execs for health fraud

    A new tactic is raising the anxiety level, and risks, for corporate honchos.



  8. Medical Claims Errors

    Almost 1 in 5 claims physicians file with commercial health insurers have a processing error that often mistakenly delays payments or rejects them entirely, according to the American Medical Association (AMA).



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