Fall 2008
By Paul R. Brazina, CPA
Healthcare Fraud: Auditing and Detection Guide, by Rebecca S. Busch, RN, CFE (John Wiley & Sons Inc., 2008), 286 pages, $65.00.
Auditors want to assume most people are honest, but they know they must exercise professional skepticism when embarking on an attestation engagement. With this skepticism comes an awareness that fraud is always possible. Fraud examiners, by contrast, learn to think like criminals and specifically look for the methods people use to misrepresent facts. In Healthcare Fraud: Auditing and Detection Guide, Rebecca Busch uses her extensive background in health care administration to expose the many ways that health care fraud can be perpetrated, detected, and ultimately prevented.
For readers who are not familiar with the health care industry, Busch explains specialized health care terminology, putting each term into its proper context. For example, in the third chapter, the author describes protected health information (PHI) in terms of the Health Insurance Portability and Accountability Act of 1996; relates it to the health care continuum players; and then discusses the implications of PHI in the audit process.
The book’s 286 pages are divided into 18 chapters, and the presentation is concise and to the point. The first eight chapters introduce the key functions in the health care system, describe the flow of transactions and information among the players, and then explain systems for data management. Opportunities for fraud abound, the author maintains, given the sensitivity of medical information and the complexity of the payment systems. While it is important for auditors to have knowledge and experience in traditional business cycles, the risks and exposures for health care fraud are unique. In health care, the audit trail includes the patient, the provider, the payer, the employer/plan sponsor, the vendor/supplier, and, in many cases, the government. Fraud can be perpetrated by any of these players or against any of these players. This book gives the auditor a detailed look into the world of health care and identifies the types of fraud that can be perpetrated.
In the ninth chapter, the author provides a traditional profile of a fraudster, but she takes an interesting approach when relaying how this person commits health care fraud. She discusses what is abnormal in the health care system by explaining what is "normal" within the system. Understanding what is normal within the infrastructure and what is normal behavior of the players in the system is necessary to detect anomalies.
The remaining chapters focus on methods to prevent fraud, detect fraud, and remediate the damage perpetrated by fraud. Some of the methods listed include the following:
-- Data analysis models - Detection models to find anomalies in the data; investigation models to determine whether the medical activities or statements are true; a mitigation model to determine the severity of fraud damage and methods to minimize it; prevention models to incorporate internal controls; response models to detect weaknesses in the health care system; and recovery models to restore the injured party
-- Profilers - Specialists who can follow data to detect fraud, identify medical errors, target financial errors, and look for opportunities to recover losses
References to online resources, medical fraud detection tools, and authoritative sources are given throughout the book. Some books are dominated by anecdotal stories, but Busch uses targeted examples and short cases to reinforce the textual material. She provides a good balance of theory, transactional analysis, and practitioner-based tools with relevant examples.
Healthcare Fraud: Auditing and Detection Guide is a valuable addition to a professional library. It is especially useful for those embarking on a career in health care auditing and fraud detection. When a fraudulent act occurs, accounting professionals are often retained to document the loss to the stakeholders and compute financial damages. This book will help auditors identify the types of losses that can be experienced by the different players, and provides methods to identify and quantify the losses.
Paul R. Brazina, CPA, is dean of the school of business at La Salle University, and a member of the PICPA Education Committee. He can be reached at brazina@lasalle.edu.
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