Revenue recognition rule changes could create 'breeding ground' for healthcare fraud 

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Because revenue-recognition rules have recently changed, healthcare companies would be wise to closely monitor all debits and credits.

Changes to revenue-recognition rules and reimbursement methods could create a "fertile breeding ground" for healthcare fraud, experts say. 

New accounting rules known as ASC 606 (PDF), adopted by the U.S. Financial Accounting Standards Board and the International Accounting Standards Board, are designed to allow investors to better compare revenue bookings between different companies, according to the American Institute of CPAs. The rules go into effect after Dec. 15.  

One of five steps required to comply with the new revenue-recognition rules includes determining the price of goods and services, which presents a challenge to providers as the industry transitions away from fee-for-service payments, The Wall Street Journal reports

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RELATED: Medicaid agencies struggle to stop payments to healthcare providers accused of fraud 

Venson Wallin, national compliance and regulatory leader for accounting advisory firm BDO USA, told the publication that the new rules could incentivize hospitals to fraudulently claim to meet quality metrics to increase reimbursements. 

Healthcare companies should closely monitor all debits and credits because of the newness of the rules, added Steven Shill, national co-leader of the BDO Center for Healthcare Excellence and Innovation. To prevent errors or fraudulent reimbursement, include a "dream team" in these discussions that represents more than just financial staff, he said. 

Fraud prevention is a priority for federal agencies under the Trump administration. Acting Assistant Attorney General Kenneth A. Blanco of the Department of Justice's criminal division said that "the department will be vigorous in its pursuit of those who violate the law in this area." 

DOJ also formed a unit to apply healthcare fraud data to the opioid crisis. 

The Trump administration has signaled a strong commitment to taking on fraud in budget proposals released earlier this year, which, despite significant cuts to the Department of Health and Human Services and medical research programs, added $70 million to the Health Care Fraud and Abuse Control program.

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