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Closing the Integrity Gap

August 13, 2007
by Dan Brown
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This article appeared in the July 11, 2007, edition of Behavioral Healthcare

's e-newsletter.

With behavioral healthcare organizations billing millions and millions of dollars to Medicaid, Medicare, and other healthcare payers each year, the growing attention these organizations are receiving from the federal government is not likely to go away. With this increased attention, more incidents of fraud and abuse involving behavioral health organizations seem to be discovered. Has fraud and abuse really increased in the behavioral health industry? Is the “integrity gap” widening in behavioral healthcare?

The “integrity gap” refers to the “distance” between the day-to-day conduct of an organization and ethical standards established by the organization. If an organization conducts itself unethically, it moves further away from its ethical standards and widens the integrity gap.

To protect the integrity of the organization and our industry, organizations must be committed to establishing an internal compliance program to prevent fraud, abuse, and other unethical practices. Leaders must reexamine their internal operations and practices to protect their organizations from fraud and abuse. Leaders must ensure a culture of integrity and manage the integrity gap.

In behavioral healthcare several high-risk areas for abuse and fraud exist, including inaccurate billings, contractual relationships (internal/external), and overbilling Medicare/Medicaid. (In fact, some financially struggling providers are believed to have overbilled Medicaid to effectively “float loans” to the organization until external audits require paybacks, which in many cases will not occur for several years.)

To manage risks and protect organizations from fraud and abuse, leaders should develop compliance programs with internal controls to manage these risks. Effective compliance programs consist of: (1) a statement of conduct and organizational ethics, (2) a compliance officer, (3) a compliance hotline (to ensure whistle-blowers’ anonymity), and (4) an internal investigation process.

Needless to say, internal controls with respect to inaccurate billing are essential in your compliance program, as this is the area that receives the primary attention from external regulators. However, other areas critical to your organization’s integrity should neither be overlooked nor be viewed as less important. Contractual relationships, conflicts of interest, vendor/referral relationships, fundraising—if mismanaged, they can seriously impact the integrity of your organization, widen the integrity gap, and impact your ability to service the community.

Dan Brown is President of Brown Consulting, Ltd., as well as a member of

Behavioral Healthcare’s Editorial Board. For more information, call (800) 495-6786.