Wednesday, January 13, 2010

Healthcare IT: A 'goldmine' for fraudsters

Health IT is serving another unexpected purpose: it's becoming a landmine for fraud.

In "Health care: A 'goldmine' for fraudsters", CNN senior writer Parija Kavilanz observes that:

NEW YORK ( -- There's a group of people who really love the U.S. health care system -- the fraudsters, scammers and organized criminal gangs who are bilking the system of as much as $100 billion a year.

Health care identity theft dominated all other crimes in the sector last year, according to Louis Saccoccio, executive director of the National Health Care Anti-Fraud Association (NHCAA), an advocacy group whose members include insurers, law enforcement and regulatory agencies.

The most common method of health care identity fraud occurs when someone with legitimate access, such as a hospital administrator or a doctor's assistant, sells patients' information to organized criminal groups.

Increasingly, criminal groups are hacking into digital medical records so that they can steal money from the $450 billion, 44-million-beneficiary Medicare system -- making the government, by far, the "single biggest victim" of health care fraud, according to Rob Montemorra, chief of the FBI's Health Care Fraud Unit.

All the stolen information includes medical insurance data and Social Security numbers, explained James Van Dyke, president of Javelin Strategy & Research, a research firm specializing in trends in security and fraud initiatives.

Van Dyke said that, with the information, the fraudster falsely bills Medicare and private insurers for drugs, equipment or treatment that were never prescribed.

I have somewhat constrained confidence in the health IT prowess of a government that cannot implement proper processes and information systems to prevent $100 billion per year in Medicare fraud. The fraud is not sophisticated; it is performed in the most simplistic manner via simple submission of fraudulent claims via boiler-room billing companies:

To collect the money, the criminals set up shell billing companies that disappear as soon as there's any indication of an investigation, according to the FBI.

I have less than stellar confidence that the very same government can oversee a national project for health IT to implement technology that is not just a panacea to healthcare's ills as effectively claimed, but goes far beyond that as an alterative that will revolutionize healthcare.

-- SS

1 comment:

Anonymous said...

I'm quite sure that IT will revolutionize health care. The way Lysenko revolutionized agriculture in the former Soviet Union.