MDs get jail terms, fines as new police squad targets health fraud

CMAJ 2000;163(5):591

Since 1998, more than 500 cases have been referred to the Ontario Provincial Police (OPP) Health Fraud Investigation Unit. The vast majority — 395 cases — involved alleged fraud by people who use the Ontario Health Insurance Plan (OHIP) illegally. There were also cases of double doctoring in which patients used several doctors to obtain controlled drugs by prescription, as well as 60 alleged cases of fraudulent billing by health care practitioners, including physicians.

If a physician is convicted of fraud, the provincial college automatically deems it discreditable conduct and has the option of, among other things, suspending or revoking the doctor's licence to practise.

Detective Staff Sergeant Keith Messham, who heads the fraud unit, says it is currently pursuing 10 cases of alleged fraud by physicians and pharmacists in the courts; the fraud involves an average of about $800 000 per case.

Ontario's police unit is a first in Canada, since other provinces rely on internal audits and inspection committees that look into billing irregularities. Newfoundland's medical board recently launched a 2-year pilot Prescription Monitoring Program to crack down on double doctoring and prescription drug abuse, a program that is already in place in several provinces.

Before 1998, health fraud in Ontario was investigated by a civilian unit within the Ministry of Health, but results from 2 independent audits caused the ministry to ask the antirackets section of the OPP to conduct all investigations of fraud involving the use of and payment for health services. The officers had to study the Health Insurance Act and its regulations, as well as in the schedule of benefits.

The squad, launched in April 1998 with 9 investigators plus Messham, doubled in size within a year. The 20 staff members now include 3 proceeds-of-crime investigators who attempt to recover funds obtained illegally. For example, if a physician uses ill-gotten gains to buy a house or boat, the unit may be able to seize that property. The growth continued this spring, when the province announced that a further $6 million is being dedicated to fighting health care fraud.

Messham says the unit's workload is growing as more people learn about it. "We're getting a lot more referrals from the public and other police agencies," he says. Most referrals come from the ministry's Provider Services Branch, which monitors physicians' billings, and from the Registrations and Claims branches, which are responsible for issuing and validating health cards and services. Messham says that "certain flags," such as out-of-whack billing patterns, pique the interest of these branches.

User fraud usually involves Ontario residents who "lend" their cards or who "double doctor" to obtain multiple prescriptions of a controlled substance. It also involves people who obtain health services illegally in Ontario. Under Canada's Criminal Code, people found guilty of fraud can face prison terms of up to 10 years, plus large fines.

Fraudulent billing by physicians takes several forms: billing for medically unnecessary services, for services that weren't performed and for unnecessary medical referrals, as well as "upcoding" — billing for a more expensive service than the one actually provided.

The fraud unit's largest case to date involves 62-year-old Stephen Kai Yiu Chung, who is alleged to have posed as a physician in Hamilton and is charged with defrauding OHIP of $4.5 million. Other physicians have already pleaded guilty to defrauding OHIP.

Dr. Alexander Scott of Kingston was sentenced to 30 months in penitentiary after defrauding OHIP of almost $600 000; he also forfeited $124 000 in an RRSP portfolio. Dr. Donald MacDiarmid of Ajax, who had false billings worth $150 000, received an 18-month conditional sentence to be served at home and was ordered to repay the money. He was also fined $100 000 and repaid the clinic where he worked $150 000. Dr. Gustavo Tolentino, a Toronto general practitioner who practises psychotherapy, pleaded guilty to defrauding OHIP of $55 000 between 1995 and 1998. He repaid the money and received a 12-month conditional sentence. (So far, only Scott has been referred to the Ontario college for a disciplinary hearing.)

The most complex case to date is ongoing. It involves 12 doctors at a Mississauga walk-in clinic who are charged with defrauding OHIP of about $2 million between Jan. 1 and Dec. 31, 1997. — Barbara Sibbald, CMAJ

© 2000 Canadian Medical Association or its licensors