Healthcare fraud can be deadly, study finds

Alex Kacik  October 28, 2019

Healthcare fraudsters deliver measurably worse care that can harm patients, according to a new study.

Patients treated by organizations later excluded from the Medicare program for fraud and abuse were between 14% to 17% more likely to die than those who were treated by their law-abiding counterparts, according to a new study from researchers at Johns Hopkins Bloomberg School of Public Health. Fraud and abuse contributed to 6,700 premature deaths in 2013 alone, their analysis shows.

Some fraud and abuse schemes involve organizations that bill Medicare for services that were never provided while others harm patients, said Lauren Hersch Nicholas, assistant professor at Johns Hopkins and lead author. She cited cases where untrained personnel read medical images, physicians doled out opioids that patients don't need and companies developed counterfeit chemotherapy drugs.

"That is an underappreciated part of fraud and abuse crimes," she said.

The most vulnerable populations—low-income, non-white, dual-eligible (in Medicare and Medicaid) and disabled—are more frequently targeted, according to the study. Those who were treated by a compromised organization were 11% to 30% more likely to experience an emergency hospitalization the year they received care.

"This suggests that fraud and abuse are one of the drivers of racial and socio-economic disparities in the U.S.," said Nicholas, adding that the findings are likely conservative estimates since relatively smaller cases often fall under the radar.

In 2018, more than 47,000 healthcare professionals were barred from Medicare and Medicaid, federal programs that provide health insurance to elderly, disabled and low-income beneficiaries, because of fraud and abuse.

Fraudulent medical practice costs the federal government an estimated $30 billion to $140 billion annually. Federal prosecutors have recouped more than $2 billion a year in fraud and abuse settlements since 2010.

Researchers compared 8,204 Medicare beneficiaries who were first treated in 2013 by a provider later banned for fraud and abuse and 296,298 patients treated by a randomly selected provider who had not been banned for fraud and abuse. They tracked mortality and hospitalization for up to three years.

Nearly one-quarter—23%—of patients seen by excluded providers were non-white, while 16.5% of patients treated by non-excluded providers were non-white. More than 27% were disabled compared with 18.6% in the control group and 34.7% were dual-enrolled compared with 21.9%.

More than 60% of patients in the sample were treated by providers found to be committing fraud. The remainder were treated by providers operating with a revoked license and those who were barred for patient harm.

The study found that providers excluded for fraud were associated with the highest mortality rate, at 17.3%. Patients who were treated by providers barred for operating with revoked licenses were 14.8% more likely to die, while those treated by providers excluded for patient harm were 13.7% more likely to die.

A similar share of patients are likely to die from fraudulent providers compared with those who are waiting for an organ transplant, Nicholas said.

"We should be looking at this as a public health problem," she said.

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