Have you heard of the fraud triangle and diamond?
The fraud triangle, developed by sociologist Donald Cressey, is a model explaining three factors that lead people to commit fraud: Pressure (or a financial problem considered unmanageable through honest means), rationalization (self-deceit justifying fraud) and opportunity (a way to make money dishonestly with low risk of getting caught).
This triangle became the fraud diamond when accounting experts David T. Wolfe, CPA, and Dana R. Hermanson, Ph.D., added a fourth element, capability, to Cressey's model. Capability is a combination of positioning and personality traits that affect whether fraud will happen even in the presence of the other three elements. Wolfe and Hermanson believe high-dollar fraud can't occur without the right person with the right capabilities in place.
"Opportunity opens a door to fraud, and incentive and rationalization can draw the person toward it," they wrote. "But the person must have the capability to recognize the open doorway as an opportunity and take advantage of it by walking through, not just once, but time and time again."
Besides intelligence, creativity and the ability to convince others to participate in fraud schemes or look the other way as they unfold, strong ego may be a sign of fraud capability. Fraudsters have confidence in their chances of succeeding without being caught. They lack a balanced, objective view of themselves and may ignore skeletons in their closets. They may have inflated views of their abilities, believe they're unique or behave with grandiosity, according to Wolfe and Hermanson.
Have you seen those traits displayed in the course of your work? I have.
My former company assessed a large overpayment to a primary care doctor who routinely upgraded procedure codes. He was a highly aggressive biller. We pulled out our graphs to show how his filing patterns deviated from specialty norms. Then he drew himself up--lion-like--and said, "I have no peers."
How's that for a professional self-image, especially considering there were more than 100 like-specialists in the state? The settlement meeting went quickly downhill from there. Weeks later, Alfredo the Peerless spat at my boss when they met at a self-service gas station.
Then there was the neurologist who never claimed payment for office visits. He filed for higher-paying comprehensive consultations instead, even though he had seen the patients for years and didn't send consultation reports to referring physicians. Our lawyer showed him the Medicare requirements for consultation reimbursement and explained how he failed to meet them. But the doctor was impervious, like a Teflon pan on which facts just wouldn't stick.
Or how about the perennial argument used by providers to dismiss specialty comparisons: "My patients are sicker than everyone else's. Most of them have [fill in the problem: diabetes, hypertension, etc.], so your numbers are meaningless." It was a big victory when data analytics helped us refute that; but this old chestnut of an argument speaks to a perception of uniqueness that may characterize fraud capability, especially since specialty data are often confronting to providers who bill inappropriately.
It's interesting to think people capable of committing fraud may share certain characteristics and traits. This suggests fraud isn't only a response to environmental factors or life circumstances. The seeds of the crime may be within the person, within their perception of themselves, of how they can influence the world, and of what they can get away with for how long. - Jane (@HealthPayer)