The Fraud Examiner
Health Care Fraud Expert Focuses on Cleaning Up Private Practices
Dr. Richard Lyschik, DDS, CFE, FAGD, President of
Practice Rescue, was in the health care industry for many years before he added
fraud prevention and detection to his skillset. While providing management
consultation to many practices, he observed a variety of fraud schemes and was
disheartened at how many medical professionals were hesitant to do anything
about it. He warns that perpetrators in health care fraud schemes can be anyone
and that doctors need to get more serious about punishing fraud.
How did you become
interested in fraud prevention and detection?
My parents came to America from Austria and I traveled
frequently to Europe as a child to visit family. Learning how to calculate
exchange rates and even interpret travel schedules made me analyze groups of
data. Traveling from country to country introduced me to strict border crossing
protocols and accurate documentation requirements. Seeing the world definitely
got my CFE analytical training off to an early start.
I later learned how to run three private practices and
began to assist other doctors with their office operations. Eventually I became
a management consultant for practices across the country and was exposed to a variety
of fraud schemes. I was finally able to validate all of the fraud observations
I made over the years as a health care provider when I joined the ACFE.
What should more
people know about health care fraud?
Health care is particularly susceptible to fraud because
of the endless variety of schemes and perpetrators. Fraud occurs at all levels,
from the smallest “mom and pop” practice to multimillion-dollar facilities. Between
charging for procedures not done, up charging for those that were done and
kick-backs between doctors for referrals to each other, there is a lot of opportunity
for fraud to be committed.
The perpetrators in health care fraud go beyond just
doctors, partners and employees. Landlords, lawyers, equipment and supply
vendors, and many more individuals involved in practices can potentially commit
fraud. Lately there has been a trend with third-party individuals and companies
that offer to come in to manage practices. They promise to grow the profits of
the practice but can take advantage of medical professionals’ lack of business
acumen and use the practice as an opportunity for fraud.
What are the most
challenging aspects of investigating health care fraud?
It is shocking at how difficult it is to get doctors to
believe that there could be fraud in the practice and just as hard to convince
them to clean it up. I am always surprised at how when we initially discover
fraud. Many doctors’ first reactions are that they don’t want to “rock the boat.”
They don’t want you to upset the cash flow or their associated lifestyle, and they
don’t want to go through a stressful firing and hiring encounter. They also worry
about upsetting the morale of the employees — they often say, “What are the
other staff going to think?” Some doctors believe they can solve the matter by
having a staff meeting and others have even naively thought that if they speak
to the fraudster the fraud will stop occurring.
Another type of doctor I’ve encountered is the one who
thinks they are untouchable because they can call upon their CPA, their lawyer,
or their malpractice carrier to get them out of “hot water.” It is rewarding
though when the doctor recognizes the gravity of the fraud — we have assisted in
successfully getting fraudsters fired, prosecuted and incarcerated. Unfortunately,
there are times when a casual approach is taken and the fraudster mysteriously
disappears and moves on to another similar health care business. It’s
unfortunate to know the fraudster has access to money, supplies, drugs and
confidential patient files again.
What is your most
memorable health care fraud case?
I will never forget the office manager who took home the entire
office computer while the doctor was on vacation. She had it cloned by her
uncle to capture more than 2,000 patient records filled with social security numbers,
insurance policy numbers and credit card data. When the doctor returned from
vacation, and the patients’ credit card charges appeared on their monthly
statements, it was discovered that the office manager went on a shopping spree
for jewelry, exercise clothes, diet pills and more. My team assisted the doctor
in the proper termination and subsequent prosecution of that employee.
Additionally, other employees in the practice were let go
and strict new fraud prevention guidelines were introduced into the practice. The
end result is that the practice became more profitable and added a second doctor
within a year because of enhanced practice methods and controls.
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