Healthcare fraud cases are flooding the media outlets, from stories of the “doctor next door” scamming Medicare out of millions for unnecessary medical treatment to other medical personnel filing claims for services that were never provided.
What might be even more alarming, however, is a recent statement by the U.S. Federal Bureau of Investigation which states that trends show an increased chance of corrupt physicians risking the health of their patients in these schemes.
Kaiser Health News reported that as of January 2014, medical identity theft accounted for 43% of all identity theft in the U.S. If you’re not familiar with this very possible scenario, medical identity theft occurs when a person’s name, health insurance identification number or social security number is used by another party to obtain medical services, supplies or devices or health insurance reimbursements.
Although Medicare and Medicaid and other health insurance companies are often victims of fraudulent practices, fraud exists in almost every type of business worldwide. The Better Business Bureau released information in June 2014 that $3.5 trillion was lost worldwide to organizational fraud in 2011.
Those employees committing the fraud tend to be educated with at least five years of employment within the targeted organization. The report stated that the fraud losses directly correlated to the amount of authority the employee had in the workplace. Additionally, the majority of fraudulent schemes were not detected until 18 months after the dishonest deed was done.
David T. Wolfe, CPA and founder of Glasgow Forensic Group, and Dr. Dana Hermanson, created a four-part breakdown of the reasons behind these fraudulent practices: opportunity, incentive, rationalization and capability. An employee has the opportunity to perform fraud if there is a weakness in the system of checks and balances that is meant to prevent this type of situation.
A person has the incentive to commit fraud if they want or need to do so. A person rationalizes the situation by convincing himself or herself that their goal is worth any risk of being caught. A person is capable of pulling a fraud scheme if they have particular traits necessary to accomplish the fraudulent act. These traits include:
-
Opportunity
The defrauder often holds a particular position within the organization that would give the person the opportunity to commit fraud. Sometimes the culprit is even a trusted member of the organization.
-
Intelligence
Remember that most fraudsters are educated with at least a four-year degree.
-
Egocentric Personality
An important trait of the fraudster is an arrogance resulting in the misconception that he or she is too good to get caught.
-
The Ability to Coerce
A fraudster often has a talent for persuasion and might even have a bullying personality.
-
The Ability to Lie
Defrauders have the ability to be deceitful, and they are often very good at concealing or misrepresenting the truth.
-
The Ability to Handle Stress Well
There is a lot of stress that goes along with committing a fraudulent act. The fraudster has an unusual knack for covering up that stress.
These traits might not be consistent with all persons who commit fraud, but they certainly are warning signs that any business owner or organizational member should pay careful attention to.
