Analysis of Fraud and Abuse in Healthcare: Legal and Ethical Concerns

This report delves into the critical issues of fraud and abuse within the healthcare system, specifically focusing on violations of Medicare and Medicaid regulations. The analysis covers four major concerns: salesmen offering premiums for referrals, subsidiaries providing rebates to patients, payment for DME training, and the manipulation of test results. The report examines the legal consequences of these actions, including violations of the Anti-Kickback Statute and beneficiary inducement provisions. The author provides recommendations to address these issues, such as educating employees, conducting awareness campaigns, and ensuring accurate reporting. The report emphasizes the importance of ethical conduct and adherence to healthcare laws to protect patients and maintain the integrity of the healthcare system. References to relevant literature and legal precedents are provided to support the analysis. The report aims to highlight the critical role of caregivers in ensuring the safety and well-being of clients and preventing healthcare fraud.

Running head: FRAUD AND ABUSE 1
Fraud and Abuse
Student’s Name
Institutional Affiliation

FRAUD AND ABUSE 2
Introduction
The Medicare and the Medicaid Anti-Fraud and Abuse provides caution to caregivers
against engaging in unlawful acts that can jeopardize the health of the clients (Stowell, Schmidt,
& Wadlinger, 2018). Additionally, the provisions state that paying for referrals is an offense.
Selling healthcare equipment at a reduced price to get clients is also a crime. Hospitals should
train patients on the usage of DME without asking for payment. Caregivers should not ‘doctor’
results to excite patients. This paper will discuss four major concerns that violate the healthcare
laws.
The first concern is about salesmen regularly offering ‘premiums’ to the employees of
home health agencies whenever their clients order DME from the subsidiary. In this context,
premiums are incentives to thank the agencies for the referrals. Rewarding individuals for
referrals is against the Medicare and Medicaid Anti-Fraud and Abuse provisions in the United
States (Clemente, McGrady, Repass, Paul III, & Coustasse, 2018). The Anti-kickback statute
prohibits healthcare professionals from paying other agencies for referrals. The law notes that it
is legal to pay for referrals in other industries but illegal in the health care programs of the
Federal States. Therefore, the salesmen are committing a punishable offense by rewarding the
agencies for referrals. I would first explain to the salesman that their actions are against the
healthcare laws. A care provider who pays for referrals is subject to jail terms and fines (Pena,
Larson, & O'Connor-Barnes, 2016). Secondly, I would caution the home health agencies against
asking or accepting payment from the salesmen.
The second concern is that the subsidiary offers ‘rebates’ to patients who use its
equipment. A rebate is a little refund that the subsidiary gives back to the clients who use
equipment like wheelchairs. The facility refunds a little money to the patients to entice them and

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turn them into loyal customers. The offering of rebates violates the statute on beneficiary
inducement. Caregivers who issue remunerations to the beneficiaries of facilities like the DME
risk facing monetary penalties from the Federal government (Ghebleh, 2017). The provision
understands that caregivers can issue remunerations to persuade the clients to continue using
their services. I would advise the employees of the subsidiary against offering rebates to the
patient. Furthermore, I would explain the legal consequences of their actions. I would also
conduct an awareness campaign to advice the patients against accepting the rebates.
The third concern is that the subsidiary pays the agency personnel and the hospital for
assisting the patients on the usage of the DME. Like the first two concerns, paying the hospital
for helping patients violates the Anti-Fraud laws. The statute on beneficiary inducement
prohibits caregivers from accepting gifts or money from a DME supplier (Fabrikant, Kalb, Bucy,
Hopson, & Stansel, 2018). The law treats the act of taking payment as a crime. It is wrong for the
hospital to ask for payment for training the patients on DME usage since it is their duty. The
home health agencies should also conduct free training to patients on the usage of DME like
clutches and walkers. Therefore, I would advise the subsidiary personnel against paying the
agency and hospital for patient training on the usage of DME. Secondly, I would caution
caregivers against accepting or asking for payment from the subsidiary.
The fourth concern is that DME may have "massaged a bit" the test results to facilitate
Medicare payment for oxygen concentration. To "massage" the test results is to ‘doctor' them to
suit the needs of the patients. The act of providing false results to the patients is against the
healthcare laws and the well-being of the patients. Providing false results can tarnish the
reputation of the health facility (Ducharme, Bernhardt, Padula, & Adams, 2017). The
government can also order for the closure of the subsidiary and the entire Marcus Welby

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Healthcare Corporation. The unlawful act can also prematurely end the careers of the salesmen.
However, the worst implication of "massaging" findings is that it can endanger the lives of the
clients. Therefore, I would advise the caregivers against providing incorrect results to the
patients. The caregivers should offer true results at all time.
Conclusion
The salesmen should not offer ‘premiums' to health agencies; since the act is against the
health laws. Payment for referrals is a criminal offense. The health provisions also inhibit
caregivers from offering ‘rebates' to patients to earn their loyalty. The subsidiary should not pay
any DME training fees to hospitals or health agencies. The issuance of ‘doctored’ results can
tarnish the reputation of the health facility and the caregivers.

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References
Clemente, S., McGrady, R., Repass, R., Paul III, D. P., & Coustasse, A. (2018). Medicare and
the affordable care act: fraud control efforts and results. International Journal of
Healthcare Management, 11(4), 356-362.
Ducharme, M. P., Bernhardt, J. M., Padula, C. A., & Adams, J. M. (2017). Leader Influence, the
professional practice environment, and nurse engagement in essential nursing practice.
Journal of Nursing Administration, 47(7/8), 367-375.
Fabrikant, R., Kalb, P. E., Bucy, P. H., Hopson, M. D., & Stansel, J. C. (2018). Health care
fraud: enforcement and compliance. Law Journal Press.
Ghebleh, S. (2017). No VIP treatment: ACOs should not get waiver protection from the
prohibition on beneficiary inducement. Vand. L. Rev., 70, 737.
Pena, J. A., Larson, J. C., & O'Connor-Barnes, E. (2016). Parallel Investigations and
Prosecutions in Anti-Kickback Cases Involving Healthcare Providers. US Att'ys Bull., 64,
47.
Stowell, N. F., Schmidt, M., & Wadlinger, N. (2018). Healthcare fraud under the microscope:
improving its prevention. Journal of Financial Crime, (just-accepted), 00-00.