Healthcare officials are confident that fraud and theft on a scale like that in the U.S. could not happen in Canada.
The American Justice Department has dismantled a massive fraud scheme that targeted the country’s Medicare and Medicaid programs.
Some 324 individuals have been charged with submitting false claims in the amount of US$14.6 billion. It appears agencies from several foreign countries, among them Russia, Pakistan and some in Eastern Europe, were involved.
They purchased dozens of American medical supply firms, stole a million personal identities and submitted more than $10 billion in fraudulent claims.
Numerous cases were also uncovered where hospitals were carrying out needless skin grafts on dying patients, and billing for them.
In addition, several pharmacies were found to have manufactured massive quantities of oxycodone, hydrocodone and carisoprodol and sold them to street-level drug dealers, generating large profits for the pharmacies.
Healthcare officials are confident that fraud and theft on this scale could not happen in Canada. In part, that’s because U.S. hospitals charge far more for medical procedures than Canadian hospitals.
In Canada, the average cost for a hip replacement is $6,071. In the U.S., the same procedure costs $14,752.
American hospitals charge $9,397 to remove a gallbladder. The Canadian cost is $3,638.
There is also the reality that America’s health-care system is famously inefficient.
Administrative costs in U.S. hospitals are twice as high as those in Canadian hospitals — 25.3 per cent of total expenses compared with 12.42.
As well, American hospitals bill an outside agency for each procedure, which leaves the system open to fraudulent claims.
Hospitals in B.C. don’t bill for their costs. They receive an annual budget from the Health Ministry, eliminating the opportunity for fraudulent claims from outside.
Nevertheless there certainly is evidence of over-billing by physicians in Canada.
B.C.’s Medical Services Commission regularly audits claims made by doctors for reimbursement. The findings are troubling. Here are some examples:
One audit found that a physician had billed the Medical Services Plan for “a high number of services (that) did not have medical records to substantiate that the services were provided.” The doctor was ordered to repay $2.1 million and abide by proper practice.
Another physician was found to have billed numerous times for provision of diabetes care, where there was no evidence of the ailment. This audit also found that the doctor’s medical records were “grossly illegible and incomplete,” and there were a “substantial number of billing claims for which there were no medical records available.” The doctor was ordered to repay $1.475 million.
In yet another case, it was found that a physician had billed for a large number of services for which no medical records were available. Indeed, in several instances no evidence could be found to show that the doctor provided any care at all to the patients in question. The physician was ordered to repay $2 million.
By all means these cases, and others like them, are an exception. Yet those doctors caught in the audit system were lucky to face only fines. Under the Criminal Code, a physician convicted of fraud exceeding $1 million can face a minimum prison sentence of two years.
A family doctor in Alberta was sentenced to four years in prison for billing fraud, while an Ontario physician was jailed for 30 months, again for illicit billing. And in some cases, doctors convicted of fraud can lose their licence, in effect ending their career.
None of this is to say there is no waste in our health-care system. Our regional health authorities employ far too many highly paid administrators. And fees paid to medical specialists are in some cases far too rich.
Nevertheless, despite its many faults, compared with the U.S., our health-care system is a model of probity.