Posted by & filed under Accounting Information Systems, Accounting Principles, Advanced Accounting, Auditing, Cost Accounting, Financial Accounting, Financial Reporting and Analysis, Financial Statement Analysis, Fraud Accounting, Intermediate Accounting, Managerial Accounting, Video Updates.

According to the Washington Post, Medicare spent $152 per member in the Huntsville, Ala., medical marketplace — 38 times the national average — for “unclassified” drug injections, including a type of injection used rarely around the country but used thousands of times a year at the Alabama Pain Clinic in Huntsville.

Questions:
1. Why is Dr. O. Jameson Stokes upset about the way in which the Alabama clinic billed Medicare under his name? Based on the information in the article, do you think this billing was ethical?
2. According to Blue Cross, what percentage of the drugs clonidine and sufentanil was overbilled?
3. Although no one at the Alabama clinic has been convicted of fraud, how many red flags can you identify that would support this type of action and what are they?

Source:
Brittain, A., D. Fallis, and D. Keating. (2014). Pain and gain: An Alabama clinic stands out amid data on Medicare payments. The Washington Post, May 10 (Retrievable online at http://www.washingtonpost.com/investigations/pain-and-gain-an-alabama-clinic-stands-out-amid-data-on-medicare-payments/2014/05/10/c266ce60-d524-11e3-aae8-c2d44bd79778_story.html?hpid=z3)