The National Health Care Anti-Fraud Association (NHCAA) reports that healthcare fraud costs the United States about $68 billion every year. In fact, 21% of bodily injury claims and 18% of personal injury protection claims involved some sort of fraud or buildup.
When a person claims to have sustained an injury and wants compensation, it can be difficult to tell whether or not the person is being truthful. That’s why insurance adjusters are sometimes skeptical when handling certain injury claims.
When an adjuster feels there’s more to a claim than meets the eye, the insurance company may decide they need to conduct a medical investigation to acquire more information about the claimant’s injuries, prior medical history, and treatments received.
What is Medical Canvassing?
Medical canvassing is an extensive research and analysis process that’s designed to uncover pre-existing illnesses, claims, and unreported treatments. This analysis can help you determine if a claimant’s history of medical treatments is true, as well as expose incidents of attempted fraud.
While plaintiffs have the chance to pursue compensation for injuries, a claimant and/or their attorney may deliberately withhold information about the claimant’s past or current medical treatments.
With medical canvassing, insurers are often able to see the bigger picture of where and when a claimant received treatment and whether undisclosed pre-existing conditions are involved.
What is Medical Canvassing Used For?
Medical canvassing involves a private investigator making inquiries at medical facilities within a specified geographic area to see if the claimant received treatment there. These medical facilities include hospitals, urgent care facilities, laboratories, pharmacies, clinics, etc.
During medical canvassing, the private investigator retrieves the treatment date information of the claimant, including their admit and discharge dates, prescription fills, and imaging dates. Then they pair it with the claimant’s statements about prior medical treatment.
By analyzing this information, a claims adjuster will be able to verify if an injury is legitimate or if it stems from an undisclosed, pre-existing medical condition that occurred outside the scope of the incident.
It’s not cost-effective to conduct medical canvassing with every claim, but it is worth it if you discover that the claimant is receiving or has received treatment for an injury that happened prior to the date of injury.
Medical canvassing is utilized for a range of insurance claims associated with physical injuries, including workers’ compensation, disability, and auto bodily injury.
Why is Medical Canvassing Necessary?
As mentioned earlier, health insurance fraud costs insurance companies billions of dollars every year. To protect your company from these huge losses, you need to thoroughly investigate suspicious medical claims.
Medical canvassing helps you:
- Determine if the claimant received treatment prior to the accident.
- Pinpoint whether injuries occurred outside of the workplace/incident.
- See if the claimant has a history of injury claims.
- Assess if the injury is actually related to the claim
- Determine if the alleged injuries are part of pre-existing medical conditions.
- Discover undisclosed treatments.
- Uncover addictions or a pattern of drug-seeking behavior.
- Substantiate or disprove the claimant’s statements.
- Reveal possible material misrepresentations about the claim.
- Provide specific information about treatments received for pre-existing conditions.
What is the False Claims Act (FCA)?
The False Claims Act (FCA), or Lincoln’s Law, is a federal law that makes it a crime for a person or company to deliberately file a false record or claim regarding any federal health care facility or government-funded program that offers health benefits.
Many healthcare claims are submitted on behalf of millions of people insured by government-funded health insurance programs. So it’s impossible for the government to effectively combat healthcare fraud on its own.
Beyond measures like medical canvassing, the FCA allows private citizens (or whistleblowers) to file a lawsuit on behalf of the government (also called a “qui tam lawsuit”) whenever they detect a case of healthcare fraud. When a whistleblower files a qui tam lawsuit, they are liable to get a share of any money the government obtains as a judgment or settlement for that fraud.
Since the False Claims Act was added to the constitution, it has exposed billions of dollars in healthcare fraud. According to the United States Department of Justice, the government recovered over $2.2 billion in FCA judgments and settlements in 2020. Over $1.6 billion of that was recovered because whistleblowers alerted the government to the fraud cases.
Because of how successful FCA is against healthcare fraud, 32 states in the U.S. have established state versions of this law.
What is a Violation of the False Claims Act?
There are different ways that individuals and businesses can defraud federal and state government healthcare programs. Here are some of them:
- Billing for services not rendered or goods not provided. Submitting a claim for healthcare services you didn’t perform, diagnostic tests you didn’t conduct, treatments you didn’t offer, and medical devices you didn’t use is a violation of the FCA.
- Billing for unnecessary medical services. If the government or a whistleblower discovers that you billed a federal health insurance company for prescribing medicine or performing a medical test that a patient did not need, you could face a lawsuit for making a false claim.
- Falsifying medical records to justify payments. It is a violation to create fake documents or records to validate false claims.
- Taking or giving kickbacks for referrals. The False Claims Act prohibits medical practitioners from giving or receiving kickbacks for referring their patients to federal healthcare programs. Kickbacks are payments or compensation for doing something, which includes money or something valuable.
- Billing separately for health services that should be included in single service fees. Some medical practitioners defraud the government by separating the bills for multiple services that should be combined.
- Exaggerating diagnoses and/or procedures to increase payments. Some medical practitioners exaggerate their patients’ diagnoses and/or medical procedures to increase the money they receive from the federal health insurance program.
- Falsifying charges in cost reports. It is a violation of the FCA for a physician to falsify their charges or entitlements to payments/reimbursements from a federal health insurance provider.
What is the Penalty for Violating the Federal False Claims Act?
Violating the federal False Claims Act can result in significant penalties.
According to the FCA, any person or organization that knowingly submitted false claims to the government will be liable for three times the damages to the government by the fraud plus a financial penalty that is linked to inflation.
Normally, the FCA references a penalty of between $5,000 and $10,000. But in June 2020, the penalties ranged from $10,781 to $23,331 for each false claim because it is indexed to inflation.
A qui tam plaintiff is liable to get between 15 and 30 percent of the total recovery from the perpetrators of the fraud, whether through a judgment or a settlement.
Pro-tip: You can only recover money under the FCA if you file a qui tam lawsuit. Merely informing the government about the case isn’t enough.
Who Can Be Subject to Penalties Under the False Claims Act?
The False Claims Act states that “anyone who violates the law is liable for a civil penalty”. So anybody can be subject to penalties for violating the FCA.
However, the people who are most guilty of these violations are government contractors and medical practitioners (doctors, nurses, therapists, etc.) who receive government grants or reimbursements.
How Do HIPAA Regulations Affect Medical Canvassing?
The Health Insurance Portability and Accountability Act (HIPAA) is a federal law that requires healthcare facilities to protect sensitive patient information and not disclose this information without the patient’s consent or knowledge.
Seeing as private investigators conduct medical canvassing without the claimant’s knowledge, it might seem that their actions violate the HIPAA privacy rule. But it actually doesn’t. You can learn more about what private investigators can and cannot do in our article “5 Do’s and Don’ts For Private Investigators”.
During a medical canvass, the goal is to find healthcare facilities where a claimant may have received treatment, and the time periods they visited these facilities. The private investigator only asks the practitioner in charge of the facility if the claimant received medical treatment there. This question usually requires a “Yes” or “No” answer. The practitioner does not have to share specific medical information with the private investigator during a medical canvass.
If the claimant was not treated there, then they don’t have any Protected Health Information (PHI) at that facility. If the investigator does not ask for the PHI of the claimant (or if the PHI doesn’t exist), they did not violate the HIPAA privacy rule. Specific details about treatment (such as dates, diagnosis, prescriptions, etc.) can only be obtained by subpoena, which Bosco can do after the initial canvass is done.
Medical Background Investigations
We assist insurance providers with disability, workers’ compensation, and bodily injury claims. We also help insurance companies and businesses protect themselves from fraudulent claims and buildups by uncovering the evidence they need.
Our investigators identify specific, geo-targeted medical facilities in the area to find out when and where a claimant may have received medical treatment in the past. They also target facilities outside of a claimant’s current geographic area based on other factors. We use our proprietary tracking system for doctors who specialize in plaintiff work or who have been known to be investigated for fraud.
We can also search within the radius of the claimant’s home or current employer. Our investigators routinely look at facilities located near prior addresses going 10 years before the date of the incident.
Our legal services are HIPAA-compliant and all of our searches are conducted by highly trained and skilled investigators.
Contact Our Medical Background Investigators
Since 1988, Bosco Legal Services, Inc. has assisted law firms, insurance companies, and businesses with investigating claims. If you need help gathering medical evidence or uncovering potentially fraudulent claims, consider the medical background investigative services offered by Bosco Legal Services, Inc.
This article was updated on 4/5/2022.