Fraud – What is it? What’s the harm?

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Fraud – What is it? What’s the harm?

By Catherine L. Waltz, PhD, LCSW
June 16, 2014 revised February 9th, 2015

I have noticed a number of disciplinary cases involving some form of fraud in the minutes of the past quarter’s Board meetings.  These cases are another example of intentional deception to the detriment of some “other”.  The cases I reviewed were frauds committed by Registered Interns.  Examples included falsifying therapy notes and billing for clients who were not seen, falsely claiming to have an academic degree as part of the application to become a Registered Intern, submitting billing for more time than was actually spent with clients, and requesting that a client provide urine (in exchange for privileges) for an employer mandated screening after probable impairment was noticed by the supervisor.

The examples reported above may seem straightforward and easily identifiable as fraudulent acts.  But, what about some practices that we may be tempted to do “for the good of our client”?  For example, what is the harm in “finding a diagnosis” or using an Adjustment Reaction diagnosis for one person of a couple in order to bill the couple’s insurance provider for couple’s/marital counseling?  Is doing so a form of fraud?

Woody (2011) stated that fraud involves an intentional deception to the detriment of another. In the question the “deceived other” is the insurer.  Reimbursements from insurance companies require at least a billable diagnosis.  The utilization of Adjustment Disorder diagnoses has frequently been the route taken by some of our peers.  What should we do when there are no true signs of depression or anxiety and none that truly meet criteria for the supposed Adjustment Disorder?  Should we just go ahead and make the diagnosis, provide the relationship services and bill the insurer?  Wouldn’t that be a fraud?

Let’s look from a different angle.  What are the implications for assigning a diagnosis to a client who doesn’t really meet the diagnostic criteria?  First, the diagnosis becomes a permanent piece of personal medical information in the client’s medical record.  Secondly, it is not very likely that all of us understand the long-term implications of a psychiatric diagnosis on a person’s medical history.  One such implication is potential denial of applications for other insurance made by our clients.  Why might the application be denied?  Failing to disclose treatment for any mental health/psychiatric problem could be considered a purposeful omission when really our client was just thinking that some relationship counseling isn’t really mental health treatment.

Finally, wrong diagnoses (one form of medical/mental health error) are very likely to lead to treatment plans that do not match the presenting problem.  When/if an audit of the services is required by the insurer what will they find?  The consequences could include suit for reimbursement of the payments received, termination of the provider/insurer agreement (which the licensed individual should report to his/her licensure Board and malpractice carrier) and, potentially, a complaint to the Board about the fraud.  I don’t think the supposed benefit to our clients who want to use their insurance outweighs those risks, do you?

References

Woody, R. H. (2011).  The financial conundrum for mental health practice.  American Journal of Family Therapy, 39(1), 1-10.

See also:       www.bobwoodyhelpspsychology.com


– Catherine L. Waltz, PhD, is an adjunct professor in the graduate program of the School of Social Work, Barry University.  She is a continuing education provider in the state of Florida providing courses on professional ethics, laws and rules, supervision, mental health error prevention and a specialist in domestic violence. https://drwaltz.com/courses/workshops-at-a-glance

The educational commentaries provided by Dr. Waltz do not constitute a legal opinion.  If legal advice is needed, it is recommended that contact be made with an attorney qualified in the jurisdiction in which you practice or is applicable to your case.  We recommend that you use your knowledge of the law and your code of ethics in conjunction with this information (and any other) when deciding upon a course of action.

By |2018-11-27T13:36:18+00:00February 8th, 2015|Categories: General, Laws & Ethics, Registered Interns|0 Comments

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