Abuse and fraud




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Anti kickback laws help in safeguarding payment for certain healthcare services and are standardized and the possibility of bribe or any form of impunity is deterred and on occurrence it is liable to prosecution in a court of law (Altshuler, Creekpaum & Fang, 2008). Such laws are referred to us safe harbors and compliance to their provisions is voluntary while non compliance is taken to be a case that one can be prosecuted for. However they are important in detecting fraud in Medicaid and Medicare insurance services and their relevance is to enhance accountability. Although this being the case organizations that are not certain of the legitimacy of such practices can ask for advisory opinions from the government anti-kickback regulation’s office to avoid such aftermath cases as stated by the Office of Inspector General (1999). False claims acts and kickbacks avoidance to either sale made to practitioners or to hospitals must be enhanced to help ensure transparency in the medical insurances. Public fraud is an abuse of treasure that is owed by the government and has got stipulated penalties since it is a crime. This paper takes a keen focus on the different kinds of abuse that can occur and the different recommendations on how to curtail them.

Laws governing Medicaid against fraud and abuse

            The requisites listed in anti bribery bodies to ensure that Medicaid practice is only done by specialists who are in the competent capacity to perform. As Altshuler, Creekpaum and Fang (2008) state laws on ambulatory centers of surgery which restricts the practice to specific gastroenterologists, surgeons and certain physicians has been stipulated prevent incompetent medical practice. Laws stipulating that there should be transparent and competent appointment of practitioners in underserved areas are also provided though still remain of concern due to their vulnerability to kickbacks, disguised payments for referrals for ones financial benefit, their recruitment and their retaining criteria has become tricky calling for intervention through frequent monitoring to prevent the abuse of these insurances through fraud. Laws stipulating the subsidies reduced on obstetrical immoral conduct, trends of selling physician practices and investment in groups in terms of referral arrangements, cooperation in delivering hospital services and ultimately the explanation for shared risks and clarifications of these laws have been provided as observed by Office of Inspector General (1999). According to Altshuler, Creekpaum and Fang (2008) the statutory laws have given a mandate to charge persons for deception, fabricated representations such as in cases of accidents, claims of lost patient and substandard services which were offered particularly if it has proof to validate such claims. Stringent protocols are followed when giving such penalties; these can be either in the form of a fine, an incarceration and also a limitation for services by such federal programs henceforth (US Federal News Service, 2006). Giving of hush money in exchange for certain services and incentives such as discounts arrangement to speed up your consultations, inductive referrals and acquisition of a specific kind of treatment at will are heavily punished. These laws are meant to foresee the future of these insurances particularly due to increased cost which does not reflect proficient services offered consequently inducing questions to the government on performances of such programs. The virtues of transparency and reduced impunity being the major focus of the Medicaid and Medicare though they remain their biggest nightmares thus reduced impacts of these insurances in healthcare.

Concerns and abuse found in this case

The law concerning joint ventures has been overstepped since it permits an upper limit of physician investors of about 50% while in essence this proposal has gone beyond since it is 60% (Altshuler, Creekpaum and Fang, 2008; Staman, 2010). This is deliberate since the motives are to maximize the profits gained. Considering it is located in a community hospital the possibility of being in an underserved area is minimal and does not have about 75% underserved patients. This means that the feasibility of this proposal is minimal and illegal according to the provisions of the law thus no need to progress with implementing it. This investment is also endangered since under the stipulated laws only solo practitioners are protected by the safe harbors thus it can be in more danger of failure if it incorporates a new partner minding that it has overstepped some of the laws. These laws state that no one will be excluded from these laws even under certain circumstances. Concerns about a proposal to give staff remuneration in the form an additional monthly bonus and also some staff privileges in return for furnishing this illegal agreement is unethical and against the law. It may cost these individuals a fine or even and imprisonment since this portrays they are conscious that this arrangement is unlawful (US Federal News Service, 2006). The arrangement of leasing should be done in light with the knowledge of the federal state but for this case it is questionable since it is being done furtively.

Concerns about both the benefactor and the recipient of bribe and the possibility of a consensus in this illegitimate act is raising questions encouraging such deals to continue in this field and hence this project proposal should not be carried on. This if known by authority would result to a fine amounting up to $25000 and an imprisonment utmost five years for each victim since it is regarded as abuse of office and tarnishing of health insurance providers thus this project should not be allowed to proceed (US Federal News Service, 2006). The equity of interests in healthcare services is not also withheld since it is being done out of egoism so that profits can be maximized, the different partners involved have different interests explaining why bribing of staff so that they can be in favor of one partner is taking place thus an additional reason why the project should be deterred. The attractive bid proposed is not only unprofessional but also unethical since it a kickback asking for a favor on the issue of accepting the partnership though unlawful and is against the statutes of Medicaid since it is being accompanied by a myriad of other corrupt acts such as privileges for staff and also some allowances offered every month on condition they agree to the bid.


It is evident that what this board of directors is planning is unlawful and unethical since it is exposing many persons to loose jobs and is deviant to follow laws of Medicaid and Medicare concerning the ant kickback laws. It is offering bribe in the form of staff privileges and allowances and is also indulging in an unlawful joint ventures in areas not regarded as underserved. These are grave mistakes and recommendations on immediate stop of the project should be done since it is a blasphemy of these laws, their abuse and a serious case of fraud. The authority should also be notified of this arrangement so that money laundering and exploitation of patients and employees may not occur. This will help it to be a lesson for other centers with similar arrangements. Stringent laws should be followed to ensure these laws are enforced and that keen scrutinizing of health insurances is done to prevent laundering the taxpayers’ money. Recommendations on educating of health professionals on the importances of transparency are also highly recommended as it will ensure wise decision making in this case by the stakeholders involved; the board of directors, the administrator and also the staff. Advice on such statutes and their true meaning should be consulted for better understanding.



        The Medicare and Medicaid which are main health providers in US are faced with the issue of abuse and fraud making them not successful in delivering healthcare in United States which has been a major concern to many elites. New statutes ensuring transparency have been formulated to curb this menace though they have a trend of slow implementation and lack of stringent following. This has called for advocacy of these laws in education, fine and imprisonment done to the law breakers and is foreseen to cause significant change on their implementation.














Altshuler, M., Creekpaum, J., & Fang, J. (2008). Health Care Fraud. The American Criminal Law Review, 45(2), 607-664.

Office of Inspector General (1999). Federal Anti-Kickback Law and Regulatory Safe Harbors. Retrieved from: http://www.oig.hhs.gov/fraud/docs/safeharborregulations/safefs.htm.

Staman, J. (2010), Health  care fraud and abuse laws affecting Medicare and Medicaid: An overview. Congress Research Service. Retrieved on 7th April 2011 from; http://aging.senate.gov/crs/medicaid20.pdf

US Fed News Service. (2006). Information Issued By U.S. Attorney’s Office for The Southern District Of Florida On Nov. 3: Jury Convicts Miami Defendant In Health Care            Kickback Case Washington, D.C.


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