Make Fraud Control Everyone's Job

Make Fraud Control Everyone's Job

Healthcare Fraud Control Articles

When I worked for Indiana Medicaid I didn’t think about fraud very often. I was very busy, and it wasn’t my job. At least that’s what I thought at the time. Now I realize that it should have been a big part of my job. If I knew then what I know now, I would have realized that many of the annoying data anomalies I encountered were caused by fraud.

When I was preparing the Medicaid budget estimates one year, I noticed that podiatry expenses had increased dramatically. I was curious about that, but I was very busy. Total expenditures for podiatry were smaller than my rounding error, so I didn’t invest the time to figure out what happened. Later, I read in the news that a podiatrist had pleaded guilty to defrauding Indiana Medicaid. At least somebody was paying attention to podiatry expenses, but how many other things did I miss that were right under my nose?

I also didn’t know what to do if I found something suspicious. Who should I tell? Would they do anything about it? I’d been to the Attorney General’s office for other business. To get in, you had to have somebody meet you at the door. After disclosing what you’d found, chances are you wouldn’t hear anything from them again unless you read about it in the newspaper after an arrest. Or maybe I was supposed to tell the utilization review team, but would they do anything with the information? Would they tell me, if they did?

My experience is typical. Five organizational problems reduce the effectiveness of fraud control:

  • Not my job
  • Don’t know how to recognize fraud
  • Nobody clearly in charge
  • No clear way to report suspicions
  • No feedback about what happened with a case

Fortunately, there are cost-effective solutions: leadership, education and coordination. In fact, you can fix some of these problems without spending money, because they require changing organizational culture rather than buying more stuff or hiring more people.

Take the Lead

Leadership is the key. Leaders in your organization need to let everyone know that fighting fraud is a top priority for the organization, and all staff have a roll to play. Announcing that fraud control is a priority is free. It will have immediate payoff if you include in your announcement that you are providing fraud control training to all staff and creating a new position—fraud control executive—that reports directly to the CEO (for government, the head of the agency). The fraud control executive will be in charge of coordinating all fraud control efforts for the organization. Part of her job will be to make sure that everyone knows how to recognize fraud and who to report it to.


Fraud education is a continual interactive process, because fraud is always changing. Everyone (including providers, patients, and claims processing, mailroom, provider enrollment, budget, finance, fraud control and prior authorization staff) needs to know what to look for and who to tell when he find something suspicious. Presentations by an expert are just the beginning of fraud control education. Your staff should teach each other about possible ways to find fraud. For example, the people who work with claims and providers on a daily basis have special insights into what suspicious activities are happening. They can let fraud control specialists know about new trends they are seeing.


Organizing a fraud control task force will be one of the fraud control executive’s first jobs. The task force can include representatives from several units in your organization as well as representatives from other agencies.

Governments are using task forces to coordinate fraud control resources from multiple agencies. For example, the Central District of Illinois Health Care Fraud Task Force includes officials from the FBI, U.S. Postal Inspection Service, IRS, Defense Criminal Investigative Service, Illinois State Police, Medicaid Fraud and Control Unit, Illinois Attorney General, Illinois Department of Public Health, United States Attorney’s Office, and Office of the Inspector General of the Department of Health and Human Services.
Coordinated efforts can produce big results. Through Operation Goldpill, an FBI undercover operation involved many state and federal agencies, law enforcement officials charged 254 defendants, seized $10.8 million in assets and levied $6.6 million in fines.(2) Operation Headwaters, which ended July 2001, is the largest undercover Medicare sting to date, coordinating over 1,200 agents from the FBI, Post Office, and Health and Human Services.(1)

Additional Resources

1. Fitzgerald, Mike. Fake Identities Helped Make Sting Work. Belleville News-Democrat 16 Feb. 2003.
2. Medicaid: Federal and State Leadership Needed to Control Fraud and Abuse; Statement of Leslie G. Aronovitz. Washington DC: United States General Accounting Office, 1999.