Patient identity fraud in the emergency department

Almost four years ago now, I left my practice as an emergency medicine physician to enter the business world.  However, the medical world isn’t easy to escape.   I just couldn’t seem to forget some of the problems I used to face in the emergency department.  So, when I had the chance to fix one of them, I took it.

The most intractable problem for me was fraud, especially as it related to drug seeking behavior.  I had patients claim their addresses were local grocery stores (they likely pulled the receipts from their wallets for the address), and it wasn’t until the stores sent letters begging us to stop billing them, that we figured out what had happened.  I had patients look me in the eye and tell me they’d never been to my emergency department before, when I knew full well I’d seen them under a different identity a month earlier.  I had people steal their friends identification then put blood in their urine so they could claim to have kidney stones under an identity unknown to our emergency department.  Simply put, we saw it all … even though I’m certain that much of the time, we weren’t even aware that we were seeing it.

Emergency departments see approximately 120 million people per year.  With the new federal health care legislation, and the paucity of primary care providers, it is likely that 40 million newly insured will swell the number of emergency department visitors in the next couple of years.  Couple this with the fact that between 1996 and 2006 years, the number of emergency departments visits increased 32% and the total number of ERs decreased 5% and it is apparent that the influx will be affecting already strained emergency departments.

Now consider that my review of billing from my days in practice, private industry data, and interviews with emergency department directors indicates that the number of people presenting to emergency departments using fraudulent or stolen identities ranges from 2% to almost 10% of the patient population.  2-10% may not seem like a great deal at first, but consider these facts:  The average emergency department sees 31,000 patients per year … if 2% of their patients are there under fraudulent pretenses, then 620 people basically stole from your community emergency department.  If the number is closer to 10% because you are closer to an urban area, that number is 3,100 people.

Why is this happening?  Some people are there to obtain health care under someone else’s identity.  Some are there to obtain drugs under someone else’s identity.  Some are there to obtain drugs under a made up identity.  The nuance and reason for fraud is myriad.

The cost, however, is not so nuanced.  Emergency department losses range from $750,000 to $3,000,000 annually from the problem.  Because emergency medicine physicians tend to bill separately from the emergency department, they lose, on average, $25,000 annually because they are seeing patients that will never pay them, instead of a patient that may pay.  Although affected by different laws than your typical emergency department (as long as they aren’t owned by a hospital system that doesn’t have an emergency department), the average urgent care center loses $55,000 annually to the problem.  Altogether, the cost is $4.5 billion to $6 billion annually.

As reimbursement is squeezed by insurers, it is time to stop ignoring this issue by pronouncing the following capitulation: “EMTALA ties my hands.”

Sean Scorvo is CEO of MiddleGate Med, Inc.

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