On May 13, Vice President Vance, the chair of the White House Task Force to Eliminate Fraud, held a press conference. He announced the deferral of $1.3 billion in federal Medicaid matching payments owed to California, which received considerable attention. He also announced that the HHS Inspector General had by letter that day warned state Attorneys General that they needed to be more aggressive in prosecuting fraud against Medicaid; that received considerably less attention. Then on June 4, Andrew Ferguson, the Chairman of the Federal Trade Commission and co-chair of the White House Task Force, announced that the HHS IG had denied the Hawaii Attorney General’s request for recertification of her state’s Medicaid Fraud Control Unit, cutting off $3 million in federal funds for the costs of that unit. Since other shoes are likely to drop, it’s worth understanding just how nonsensical…
MANAGEMENT & CULTURE (THE “TONE AT THE TOP”)
Fraud thrives in “sloppy” environments where leadership ignores the rules.
- The Fraud Triangle: For fraud to occur, three elements must be present: Pressure (the need for money), Rationalization (thinking “I deserve this”), and Opportunity (weak controls). You can only control the Opportunity.
- Whistleblower Hotline: Provide an anonymous way for staff to report “odd behavior.” Most internal frauds are caught via tips, not audits.
- Background Checks: Conduct credit and criminal record checks for all employees in financial or data-sensitive roles.
- Annual Ethics Training: Make sure every staff member knows that the company has a Zero Tolerance policy toward “borrowing” from petty cash or fudging overtime.