Watchdog says Bureau of Prisons is failing to detect healthcare fraud

[December 21, 2017] By Sarah N. Lynch

WASHINGTON (Reuters) - The U.S. prison system is using outdated procedures that fail to detect and prevent fraud by doctors and other healthcare providers who may be overbilling the government for services, according to a Department of Justice report released on Wednesday.

The report by the department's Inspector General's Office cited systemic problems with how the Federal Bureau of Prisons was reviewing and paying out claims to private companies and hospitals with an estimated $1.2 billion in government contracts from 2011 to 2020.

U.S. government spending on outside medical care for inmates has been rising in recent years, with a 24 percent increase from fiscal 2010 through 2014, said the report.

The Bureau of Prisons did not immediately respond to a request for comment.

The report found that since 2008, only 16 of the 122 were submitting claims electronically to a third party vendor to review and adjudicate them. The remaining 106 are using an outdated, manual paper process in which Bureau of Prison staff review and verify the claim amounts.

The report also strongly faulted the third-party vendor, who was not named, saying that despite a contract requirement to detect possible fraud, it had failed to provide any fraud reports since it was hired in 2008.

In a review of the more than 337,000 claims worth $399 million processed by that vendor, the report said the office identified a number of potential fraudulent claims that were never detected or reported to the Justice Department.

In one case, a psychiatrist billed the government for seeing 24 inmate patients a day, but used a billing code that requires a comprehensive 45-minute face-to-face appointment. That would have added up to at least 18 hours a day, the inspector general said.

The third-party vendor that reviews claims in turn recommended that BOP should pay the psychiatrist for conducting as many as 61 psychiatric consultations in a single day.

The inspector general recommended that the Bureau of Prisons require all contracted healthcare providers to submit electronic claims and enforce contract requirements with the third party vendor that reviews the claims.

(Reporting by Sarah N. Lynch; Editing by Richard Chang)

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