Background On Criminological Theory

What does criminological theory have to do with health care fraud?

Healthcare fraud is a computer crime – so the theories about traditional criminology are transferable to computer crime that can, in turn, translate to healthcare fraud.

Evolution of A Theory:

1920- White collar crime is a learned behavior (Differential Association Theory @ Edwin Sutherland).

1970 – Motivated offenders find suitable targets in the absence of a capable guardian.  (Routine Activities Theory @Felson and Cohen)

2005 – Routine Activities Theory becomes the Cybercrime Routine Activities Theory as adapted to computer crime – without protection, computers are vulnerable to crime (Cybercrime Routine Activities Theory – Kyung-shick Choi)

Conclusions:
Health care fraudsters commit crime by being motivated through financial rewards.  Patients and health plans are suitable targets because there is little oversight.  Health care fraud is learned through association with other health care fraudsters.

 In addition: 

• Suitable targets are patients who have no idea in many cases that their medical identity is being compromised
• The pharmacy benefit area is fertile grounds for fraud:
  • Some traditional PBMs – who should be the capable guardians – look the other way because more claims means more profit…why reduce the number of the claims when spread pricing is taken on all claims including fraudulent claims?
  • PBMs have taken control away from plan sponsors because oftentimes plan sponsors do not have access to their own claims data.

If crime theory is right, we need to find people within the health care system who fall under all of the following categories:

1. They are motivated offenders
2. They have learned crime from others
3. They have suitable targets
4. They have no guardianship

The Health Care Fraud Dilemma: How do you find the fraudulent claims when they all look alike?

Solution: Find the bad guys by finding the bad guys who taught them how to be bad

The COPs system uses this theory to find suspicious relationships between prescribers, pharmacists and patients.