1. C HAPTER 24 Code Blue Health Science Edition 4

2.  Western Civilization prides itself on having constructed a free society.  Basic freedoms include the right to:  Independent thought  Free speech  Freedom of religion  Freedom to travel  Freedom to start and conduct business

3.  Freedom is the right to be wrong, not the right to do wrong. --John George Diefenbaker, 13 th Prime Minister of Canada

4.  Free societies are based on honesty and trust  This is especially true in the area of business, but it is also true in the area of healthcare.

5.  Fraud is deception intended to result in financial or personal gain.

6.  Contracts could not be written because society as a whole didn’t keep promises  Checks could not be written because people as a whole would write them with no money in the bank

7.  Credit cards could not be issued because people as whole would not pay make their credit card payments  Banks could not loan money because society as a whole refused to make their payments

8.  Couldn’t trust that their physicians and nurses hadn’t cheated in school  Couldn’t trust doctors to know and choose the best treatments

9.  Couldn’t trust hospital nurses not to steal their pain medications

10.  Couldn’t trust nurses and other healthcare professionals to report professional misconduct or observed errors in medication or treatment

11.  Couldn’t trust licensure organizations to weed out bad professionals REVOKED

12.  Is a major problem in both business and healthcare  Costs patients, employers and employees billions of dollars  Erodes the trust that is essential to a free society

13.  Embezzlement  Stealing trade secrets  Overbilling  Falsification of records  Deceptive advertising  Production of shoddy products  And thousands of other practices that most people recognize as dishonest

14.  Performing unnecessary services solely for the purpose of billing insurance or patients  Billing for unnecessary excessive services  Billing for more expensive products and services than were provided

15.  Billing for products and services that were not provided  Billing for the same products and services twice  Inflating the diagnosis under DRG reimbursement to increase payment

16.  Certifying that treatments that are not covered by insurance plans are medically necessary when they are not

17.  Providing a false diagnosis to justify tests, procedures, products or surgeries that are not necessary  Accepting kickbacks for patient referrals  Waiving patient co-pays or deductibles and over-billing the insurance carrier or benefit plan

18.  Stealing hospital property  Falsifying pay card data  Stealing drugs  Falsifying medical records  And so on

19.  Investigators have shown the following conditions are needed:  A financial need on the part of the employee (it could also be a drug need for an addicted employee)  An opportunity due to poor controls  A low probability of being caught

20.  It was owed to me  i.e. “I am not paid enough”  Everyone else is doing it  It won’t be missed  I will pay it back later

21.  Vary rarely does one go from being a totally honest person to a “crook” in one step.  Usually it is a slow, incremental process.  Studies show that people get involved in fraud one step at a time.

22.  Having taken the first step  It is easy to rationalize the second step  It is sometimes necessary to take the second step to cover the first

23.  People will sometimes do things as a part of a group that they would never do individually.  This is known as the “mob mentality.”

24.  Investigators who have researched large corporate fraud have often found that those involved did it out of a senses of false loyalty to the boss or to the organization.

25.  We love people, but we are loyal to principles.  When an employer hires you, he or she buys your talent, time, and best efforts.

26.  During the years that the author was a hospital administrator, he was surprised many times by the lack of integrity showed by business organizations, healthcare organizations, and employees.  Make a decision early in your career to be honest.  Draw a line, so to speak, as to what you will never do and then never cross it.

27.  Wes Douglas is discovering various instances of dishonesty and fraud in his hospital.  The best way to correct this in the future will be to:  Establish clear cut policies on employee behavior.  Establish controls to prevent employees from stealing hospital assets.  Establish a good audit program to see that policies and controls are working.