When is Fraud Really Fraud?


If a tree falls in a forest and no one is around to hear it, does it make a sound? If the TRICARE Management Activity (TMA) says the sky is green is it really green even if it looks blue to us? Or is fraud only fraud until TMA is involved and then proclaims it is not fraud?

These questions may profound man for eternity. But we will take a look at what is and is not fraud in the eyes of TMA. Then maybe we can answer the second two questions ourselves.

It is common knowledge that under the Demonstration the contractor, International SOS, (ISOS) directed and encouraged physicians and hospitals in increase their charges above and beyond what are their normal customary and reasonable charges when treating Demo patients. We know this to be true because we have testimony from multiple physicians and hospital staff, who have, in front of witnesses, admitted that the increased fees were at the direction of TRICARE [the contractor]. For physicians these increases range from 200% to 500% while for hospitals a more modest 10% to 20%.

TMA declared this was not fraud by saying, “There may be instances in which Institutional providers are charging up to the CMAC rate because of the added time and effort they expend to submit claims and understand the TRICARE Program. This is not an uncommon practice in the Philippines (and elsewhere in the world). Patients with medical insurance will in many cases be charged a higher fee to cover the costs of the additional effort in processing the claim and recovering their invoiced amounts as the providers are accepting financial risk of getting paid the outstanding amounts as opposed to an immediate cash payment from an individual.”

In other words TMA said Demo providers can increase local customary fees by up to 500% and it is acceptable to them and payable in many cases. Further they are free to add these additional charges due to administrative costs and because they are taking a risk in not being paid, apparently due to a CMAC that does not reflect local rates. In addition TMA claims increasing these fees are a normal and accepted practice by providers all around the world when dealing with third party payers.

  1. Let’s examine the claim that providers all over the world increase their fees by as much as 500% when dealing with a third party payer. Here is what we know.
  2. Local providers generally do not increase their fees when dealing with local third party payers. While there may be a few exceptions they are the exception and not the rule and are never increases that even approach a twofold increase in cost, let alone a fivefold one. Multiple interviews of local third party payers have proven this to be true and this article also reinforces that truth.
  3. TMA’s Prime, a modified HMO/PPO, U.S. HMOs and PPOs routinely obtain discounts from providers in exchange for being able to mandate patients use a limited number of providers in the same manner the Demo does to beneficiaries. See Preferred Provider Organization.

It is obvious that the claim that the sky is green, all providers obtain massively higher fees from third party payers, has no validity in reality and further when TMA is not involved these actions are typically called fraud.

  1. Let’s look at what TMA had to say in the past about these increases in fees by providers billing TRICARE.
  2. In 2010 TMAs Program Integrity group, who claims to fight fraud, did a presentation at an annual TMA sponsored conference attended by contractors and others involved in TRICARE. Part of this presentation included a slide entitled “Overseas Fraud Issues”. Among those issues listed were two bullets of interest. “Charging beneficiaries rates for services/supplies in excess of those in locale” and “Billing substantially in excess of customary or reasonable charges”. On another slide entitled “HVC Corruption at its worst…” is another bullet that says, “Inflated billings: 244%-500% over actual charge”; look familiar?
  3. In the 2008 TMA Program Integrity Annual Operational Report they list some of their successes with fighting fraud. Of interest is what they referred to as “One of the major successes achieved during 2008” and listed it as “Case Study: Health Visions Corporation – Services Not Rendered, Excessive Charges”. Of note in the narrative is the following sentence, “In addition, Health Visions inflated the bills of other providers by one hundred percent or more before submitting the bills for payment to the United States Government.” Consider that under the Demo hospitals, institutional providers are inflating the bills of other providers by 100% or more before submitting the bills for payment to the U.S. Government.
  4. In the 2010 TMA Program Integrity Annual Operational Report they again list some of their successes with fighting fraud. Of interest is another case study, “Case Study:  General Practice Group – Philippines”. Of note in this narrative is the following comment about this group’s billing practices, “billing in excess of customary or reasonable charges”.

Once again it is obvious that the claim that the sky is green, these overcharges in excess of customary and reasonable charges is an acceptable practice by everyone, has no validity in reality and further when TMA is not involved these actions are called fraud by them.

Next let’s examine the claim that these increased fees are acceptable administrative costs that all providers, worldwide, add when seeing patients with a third party payer to cover such things as filing claims and learning the policies.

Let’s look again at the presentation referenced in 2.a. above and again at the slide entitled “Overseas Fraud Issues”. Among the bullets was this one, “Padding bill w/network administrative costs disguised as health care charges”.

Again it is obvious that the claim that the sky is green, adding additional administrative costs and listed as health care charges, has no validity in reality and further when TMA is not involved these actions are called fraud.

What conclusion would you draw from this? To us it appears that for TMA, fraud is only fraud when they find it convenient and the same actions by their contractor and associated providers is declared legal, reasonable and acceptable practice found all around the world. This still begs the question from above. Is fraud only fraud until TMA is involved and then proclaims it is not fraud? What do you think?

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About TRICARE Overseas Philippines

We are U.S. Military retirees working to insure we obtain the medical benefit promised in spite of the Defense Health Agency.
This entry was posted in Closed Network, CMAC Table, International SOS, Tricare Management Activity (TMA), Tricare Overseas Program Philippines. Bookmark the permalink.

4 Responses to When is Fraud Really Fraud?

  1. Peter SCALZO says:

    I don’t even use TriCare, and I think we (veterans) should boycott their so-called services and send the bills to the VA for remuneration. This is not their ball game, but will raise the “bar” and shed some new light and concern on the outlandish and greedy practices of the TriCare Overseas Program Philippines…

    Peter Scalzo
    (former Dept. Service Officer @ USDVA for the VFW)

    Liked by 1 person

  2. Mark says:

    The statement by TMA that it is customary and allowable to charge higher fees because of administrative costs is a load of bunk. My stepson has Medicard insurance provided by his employer. Not only does the hospital and doctor not increase their fees, they give a discount of 10% to 20% which in turn lowers his co-payment. I am sure there are also administrative costs involved, but there is an agreement between the insurance company and the providers which allow those discounts. ISOS had to encourage the providers to increase fees in order to get them to sign up. I am sure it does cost more to administrate the convoluted Tricare claim system, but why should the patients have to subsidize those extra costs by paying higher fee? I will continue to use Tricare and file claims and I recommend that all beneficiaries do the same. Dropping out of the system is exactly what TMA and the rest of them want us to do. That way they can brag about what a good job they are doing lowering the cost of Tricare in the Philippines. Remember, fewer claims equals lower cost to Tricare, so keep filing despite the hassles and extra efforts. There are people like Jim that are willing to assist those beneficiaries that need help submitting claims.

    Liked by 1 person

  3. wgraue says:

    This has been evident since the stsrt of this benefits-destructive farce. It seems most of our elected representatives display an apparent disinterest in this proceeding fraud.

    Federal and host country laws are being broken. A crime is being commited against not only we retired military veterans, but against American tax payers and the host government as well.

    Liked by 1 person

  4. Jon Espiritu says:

    As Whole ( T M A )

    Liked by 1 person

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