What is a fraud?
As per Wikipedia, in criminal law, a fraud is an intentional deception made for personal gain or to damage to another individual.
In the healthcare industry the term ‘fraud’ can be categorised into three groups, namely insurance frauds, drug fraud and medical fraud.
The image of a hospital is of immense importance for the patients to come for treatment. The misconducts of a hospital may cause havoc in their reputation and brand image as well as result to lose of business. Some common malpractices that can risk a hospital status due to the billing errors or intentionally done by billing person for his personal gain are:
Adding up surplus services in a bill
There is a risk of adding up services not rendered by the hospital in the patient’s bill and handing over a bill with this additional amount to the patient. Later, the extra services are deleted and brought down to the original by changing it in the billing system. This way the billing person makes money without the hospitals knowledge thereby leading to fraud.
Changing the service charges in the system
In this case, instead of adding extra services there is a chance of alteration of the hospital service charges in the system and mark them higher. After the patient makes his payment of these higher charges, the amount are brought down to the original and thus leading to the fraud.
Backdated billing
In some hospitals the accounts are checked on a day-to-day basis. In this case there is a chance of shifting the billing date to an earlier date and issue a bill to a patient. This amount will not reflect in the daily billing.
Payment updation
In this instance, after the cash is collected from the patient the billing amount can be reduced in the system. This can be done by making changes in the paid amount. This way the hospital will receive a lesser amount and the difference will be bagged by someone else.
Multiple names under single billing number
In this case there is a major risk of issuing a single bill to a number of patients by keeping the billing number same but only changing the names in the system. This way the hospital can be deceived of a superior amount.
Stock pilferage
A few departments of some hospitals do not make proper entries for their stocks. For example, if there are 10 x ray films, they would register for only eight and rest two films will be used for patients without making an entry.
However, there are a few key points through which hospitals can prevent such malpractices.
Distribution of duties
The system administrator should allocate tasks evenly so that one single person does not prepare bills/take payments/make entries in the system. Roles should be properly designated in a way that one single employee is not in charge for the entire billing process.
Regular audit is compulsory
Systematic checking must be performed of all the cash/stock related reports in a daily, weekly and monthly basis so that it stops backdated entries and manipulation of bills. Regular audits can stop the human frauds from taking place.
Outsource inventory counting services
The task of counting of stocks should be performed by a team of outsourced professionals particularly for larger hospitals.
Efficient software with specific privileges
By implementing software with specific features like individual user login, the hospitals can be assured that no malpractices can take place as the system will have set privileges which will restrict all kinds of scams.
Below are two sample cases we came across after implementation of our software:
Case I
The account department of a hospital found some of the bills in the system, showing refundable amounts. After thorough investigation, it was found that the billing user had updated the amount in the system and grabbed the extra money.
As our software does not permit payment updation so the system was displaying the refundable amount.
A complete track of the every user’s task is stored in the system which can be monitored by the admin executive. Hence, any frauds if at all occur can be tracked right away.
Case II
A billing executive was using a single bill with multiple names by keeping the billing number intact. This case was pursued by the system administrator through the tracking of user logins and task performed which was monitored through our software.
Use of technology in fraud handling
Technology can play a major role in bringing an end to the frauds arising in the hospitals. The right software must be implemented to stop the malpractices. While implementing software, a hospital should look for the following features like:
Roles and privileges
The users of the system will be assigned a specific role and set of privileges.
He will be adding/updating /accessing only the part assigned to him. Here we have mentioned some of the must privileges that need to be set only for admin executive:
- Updating patient name.
- Updating/Cancelling payment
- Updating concession
- Changing rates
Different user logins
Every user will have a separate login ID & password. The software will keep a track of what the user has done in his login. The individual user will be responsible for addition/updation/amount collected in his login.
Linked inventory consumption
The inventory should be linked in the system with tests performed. This way the stocks can be updated automatically. Entry of each wastage or extra usage also needs to be entered. This will be an additional check to avoid frauds.
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