The Resident and the reality of healthcare fraud

This publication is authored by and reflects the views and opinions of PT Integrity Indonesia. More information about PT Integrity Indonesia is available at www.integrity-indonesia.com.

The Resident, a gripping medical drama that aired on Fox starting January 2018, has recently gained attention on Netflix, finding its way into many viewers recommended watchlists. Set within the bustling corridors of Chastain Park Memorial Hospital, the series offers an intriguing behind-the-scenes look at the healthcare system, highlighting the day-to-day lives of doctors, nurses, and administrators.

At its core, the show dives deep into the ethical and personal challenges faced by medical professionals, often portraying dilemmas involving corrupt practices, medical malpractice, and the tension between profit-driven hospital policies and patient care. While fictional, The Resident draws attention to some harsh realities that mirror the real-world challenges of the healthcare industry, one of which is healthcare fraud.

Healthcare fraud is a growing issue that significantly impacts the healthcare sector, causing both financial and non-financial damage. The scale of material losses is staggering, with approximately $455 billion lost annually out of the $7.35 trillion spent globally on healthcare services.

In Indonesia, the situation is equally concerning. According to Alexander Marwata, Deputy Chairman of the Corruption Eradication Commission (KPK), healthcare fraud accounts for about 10% of public health expenditure, translating to roughly IDR 20 trillion in losses. These figures underscore the immense burden fraud places on already stretched healthcare resources.

The sophistication and complexity of healthcare fraud make it increasingly difficult to detect and prevent. Fraudulent activities range from overbilling and unnecessary treatments to more elaborate schemes involving falsified claims and kickback arrangements. Globally, the healthcare fraud analytics market is projected to expand exponentially, with forecasts estimating its value will reach $9.66 billion by 2028

Connecting Fiction to Reality

While dramatized for entertainment, the series vividly portrays how doctors and hospital management manipulate patient’s cases, ranging from billing fraud to unnecessary medical procedures.

These scenarios, though fictionalized, reflect common forms of healthcare fraud seen in real life, including:

• Billing Schemes: Overcharging patients or insurers by claiming for services never provided or upcoding procedures to higher-paying ones.
• Unnecessary Treatments: Performing excessive or irrelevant medical procedures to inflate costs.
• Kickback Arrangements: Accepting incentives for patient referrals or prescribing specific drugs and treatments.
• Credentials Fraud: Employing unlicensed professionals or falsifying qualifications.

A real-world fraud case

Just recently, The Malaysian Social Security Organisation (SOCSO), also known as Perkeso, uncovered a significant healthcare fraud scheme. Intelligence gathered by Perkeso’s Anti-Fraud, Ethics, and Integrity department led the Malaysian Anti-Corruption Commission (MACC) to expose a sophisticated operation run by a cartel.

The Jemaah Doktor (JD), or medical board, was arrested on suspicion of colluding with the cartel. For years, this group allegedly exploited false disability claims to siphon millions of ringgits—equivalent to hundreds of thousands of US dollars—from the organization.

Central to the fraud was the practice of upcoding, where doctors submitted false claims with fabricated diagnoses, falsely indicating that claimants had sustained fractures in their hands or legs. To make these claims appear credible, the doctors issued medical certificates granting the claimants 90 days of medical leave.

Moreover, a panel of doctors was complicit in verifying these fraudulent claims. However, upon further investigation, including visits to the hospitals and examinations of actual X-rays, it was revealed that no fractures existed at all.

In this scheme, the claimants received 50% of the money, while the remaining half was distributed among the doctors and agents involved. Perhaps the most distressing aspect of this case is the involvement of medical professionals. Their profession is fundamentally reliant on public trust, and when that trust is broken, the consequences can be far-reaching

Combating healthcare fraud

Combating healthcare fraud requires a multi-faceted approach involving prevention, detection, and enforcement. Here are some key strategies to effectively tackle healthcare fraud:

1. Strengthening Regulation and Oversight

Government and regulators must enforce strict rules on billing, claims, and medical procedures. Regular audits and clear reporting requirements ensure compliance with ethical and legal standards

2. Whistleblowing Systems

Enhancing transparency and accountability by holding staff at all levels responsible for their actions. Clear and accessible whistleblowing systems, help detect fraud early.

3. Advanced Technology and Data Analytics

Leveraging technology can help identify anomalies or unusual patterns in claims and billing. 

4. Education and Awareness

Educating healthcare providers and staff on the legal, ethical, and financial impacts of fraud is key. Regular training raises awareness of common fraud schemes and the importance of ethical practices.

Just as The Resident entertains, it also serves as a reminder of the real-world challenges fraud poses, not only to healthcare systems but in many other forms.

As the year draws to a close and you enjoy your well-deserved holiday break, take a moment to reflect on the importance of honesty and integrity in all aspects of life. Let's make this season joyful and fraud-free by staying mindful and making ethical choices each day.