Home Research Projects What is a Crime? Publications Fraud Against the Public Purse by Health Care Professionals: The Difference of Location PART ONE: Health Care Fraud: The Difference of Location

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What is a Crime?

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PART ONE: Health Care Fraud: The Difference of Location [1]

In 1939, Sutherland coined the phrase “white-collar crime” to draw attention to crimes committed by the upper class and the fact that they were “not ordinarily included within the scope of criminology [2].” Such crimes were less likely to be prosecuted in the criminal justice system than crimes by the lower-class. If such deviant acts were processed at all, it was often by administrative agencies. This difference of location in effect provided criminal immunity to white-collar criminals. Sutherland’s definition of crime was strongly rejected by Tappan, a lawyer-sociologist, who would have limited the term “crime” to criminal law prohibitions and “criminal” to those who had been found guilty by the courts [3].

The debate over “what is (a) crime?” has a long history and continues today [4]. Greer and Hagan’s “crime pyramid” and Henry and Lanier’s “crime prism” are attempts to integrate the various definitions of crime. According to the crime pyramid, deviant acts that are more likely to attract the criminal label involve “(1) broad agreement about the wrongfulness of the acts, (2) a severe social response, and (3) an evaluation as being very harmful [5].” Henry and Lanier point to a number of limitations of the crime pyramid, including the fact that crimes of the less powerful [6] “are far more likely to receive the full weight of the law than crimes of the powerful [7].” Henry and Lanier develop a crime prism that differentiates between highly visible crimes (usually crimes of the less powerful, which they situate on the top of the prism) and relatively invisible crimes (usually crimes of the powerful often conducted in private and violating trust, which appear on the bottom of the prism). There are four dimensions to the prism. First, generally, there is the greatest social agreement at the top of the prism and the least amount of social agreement at the bottom. Second, behaviour in the upper part of the prism is more likely to attract a social response than crimes towards the bottom. This differential response, in part, reflects the ability of the powerful to influence the definition and application of the laws. Third, crimes at the top of the prism generally result in more direct individual harm, whereas crimes at the bottom involve indirect social harm. Both can involve very serious harm, including death. Fourth, crimes at the top of the prism are targeted more at individuals, whereas crimes at the bottom are targeted at social categories (e.g., people who work in a high risk occupation) [8].

In reality, we use the criminal law to enforce some laws which lack social consensus and which cause little harm [9]. Sometimes the enforcement of our criminal law causes more harm than it prevents [10]. We also exclude from the criminal law activities that cause great harm [11]. When asking “what is a crime?” the social harm we do not define as crime is as important as that which we do. It appears that what is key to the nature of crime in both the crime pyramid and the crime prism is our response to unwanted behaviour. In defining crime, what social actors do in terms of enforcing the law is as important as the law itself.

The Law Commission of Canada took up the task of defining “what is a crime?” in a Discussion Paper released in 2003. It reviewed a number of earlier reports that called for the criminal law to be limited to controlling or responding to serious threats of harm when other means of control are not appropriate [12]. In a section on the “Realities of Criminal Law,” the Commission recognized that our reactions to crime are as important as our definitions of crime. Some crimes are dealt with privately; some are not dealt with at all. Some offenders are “over-policed,” others are “under-policed.” This blatant inequality led the Commission to ask, “Why do we treat some people as criminal and not others [13]?” It later asks, “Do our intervention strategies support notions of equality [14]?” In 2004, the Commission published a series of case studies on both the creation and enforcement of criminal laws in Canada. In their introduction to the publication, Des Rosiers and Bittle call for “a more equitable and accountable process for defining crime and enforcing criminal law [15].”

This paper on fraud by health care professionals is not about the creation of new laws, but the enforcement of laws that have been around for some time. Although historically there was some question as to whether fraudulent practices should be considered criminal [16], today there seems to be a general consensus that fraud should be prohibited. At least there is no widespread support to decriminalize fraud, as there is, for example, with the offence of possession of marijuana.

Under section 380 of the Criminal Code, anyone “who, by deceit, falsehood or other fraudulent means . . . defrauds the public or any person . . . of any property, money or valuable security or any service” commits the offence of fraud [17]. Fraud is a crime that spans socio-economic classes. It ranges from welfare and unemployment fraud to health care fraud by doctors, legal aid fraud by lawyers, and corporate fraud by officers and directors of corporations. The crime of fraud allows us to examine how we deal with one crime that occurs in a variety of different social and economic spheres. Although there are many issues surrounding the elements of the offence of fraud [18], the more contentious issues seem to be in how we enforce, or do not enforce, this law. What we do about a law is perhaps as important or more important than what the law says, and has a major impact on “what is a crime [19]?”

Crime definers can respond to fraud and other billing misconduct by health care professionals by a number of different means. If fraud is discovered, it can be ignored or tolerated. The government agency in charge of monitoring the payment of bills can react informally or formally. The police may or may not be called upon to investigate. The Crown may or may not prosecute under the Criminal Code or provincial legislation. The judge may or may not find fraud, and the social context may be a deciding factor [20]. The professional may bebrought before the self-regulating organization (SRO) for a disciplinary hearing. A study by Ericson and Doyle, on how insurance companies define and regulate fraudulent insurance claims, is particularly illustrative of how laws are differently enforced against the rich and the poor. The authors found that one insurance company, which catered to clients from a more desirable socio-economic background, serviced them by accommodating professional in-house adjusters. Another company, with clients from a lower socio-economic background, contracted ex-police officers as private investigators to reduce the amount they had to pay on insurance claims, and it more readily invoked the criminal justice system [21]. When people question whether there is one law for the rich and one law for the poor, it is generally a question about the application of the law–law in practice or law-in-action, not the definitions of crime. This is a paper about law-in-action.

I. Research Methods

Part II of this paper reviews the literature on the range of health care fraud that exists and narrows the scope of the paper to a specific form of health care fraud and misconduct by professionals–that which occurs during fee-for-service billing. Most of these professionals are medical doctors because they have the greatest access, in the greatest number, to the fee-for-service billing system. This part then briefly examines historical concerns over fraud by health care professionals, attempts to measure the extent of health care fraud, and how the work of professionals is controlled.

Parts III and IV review the legislation governing health care billing, and how deviant billings are monitored and processed in British Columbia and Ontario. In order to piece these processes together, I canvassed the legislation, regulations, and publications by the government agencies that monitor fee-for-service billing. I also searched newspapers, and websites and bulletins/newsletters of the government agencies and the colleges of physicians and surgeons. The Ontario system is much more transparent, especially following the government of Ontario’s appointment of the Honourable Peter Cory on April 30, 2004, to review and make recommendations regarding "the best-practice method to audit fee-for-service claims that: (a) is accountable to the people, physicians and government of Ontario and (b) rebuilds the confidence of the medical profession in the audit process." Public documents, including submissions to the Review, are posted on a public website, and I accessed them as part of my research.

Part V describes administrative, self-regulating, and criminal and quasi-criminal actions against health care misconduct commenced between 1990 and 2003 across Canada, which were available in the public domain through court and Quicklaw databases, newspaper coverage, and court transcript services. It then focuses in greater detail on cases arising out of British Columbia and Ontario and examines the similarities and differences between the two provinces. Cases were coded and entered into SPSS to assist in both quantitative and qualitative analysis (see Appendix A for the Coding Sheet).

There were some differences between the two provinces in terms of access to information. The College of Physicians and Surgeons of Ontario decisions are available through its website and Quicklaw. The College of Physicians and Surgeons of British Columbia takes the position that its decisions are covered by privacy legislation and it will not release them. The College simply refers inquiries to the short summaries of its actions that appear on its website. None of its full decisions are posted on its website or on Quicklaw. The only hint at the details of what these decisions contain is when a doctor appeals them to the courts or the facts make their way into another court decision, such as a divorce or bankruptcy case. The lack of transparency exhibited by the British Columbia College is becoming more the exception than the norm with professional SROs, and one might question why a professional SRO, with disciplinary powers delegated to it by government, should lack such transparency.

The College of Physicians and Surgeons of Ontario has a database of its physicians accessible through its public website which includes their disciplinary history, year of birth, and year and place of graduation. Unfortunately, information about physicians who have resigned from the College is not retained on the public website. The British Columbia College of Physicians and Surgeons launched its database in January, 2005. It includes disciplinary history (a brief summary only) since January 1998, year and place of graduation, but not year of birth.

Although court decisions are in the public domain, there were still problems gaining access to transcripts. I was told that transcripts in Ontario are destroyed after six years, and that one cannot order a transcript without the name of the judge before whom the accused appeared or the name of the reporter. The date of appearance and the name of the accused are not sufficient. Court transcripts were much easier to order in British Columbia as the name of the accused (even when misspelt) was sufficient to order a transcript.

I conducted interviews with ten lawyers, doctors and administrators who worked in the health care system in British Columbia in order to better understand how the system worked (see Appendix B for the Interview Schedule and further explanation). I was greatly assisted in understanding the system in Ontario by a number of submissions to Justice Cory, whose review of the audit system in that province was ongoing as I conducted my research.

The conclusions, Part VI, identify a number of issues that arise out of the differences of location–professional fraud and welfare fraud, and health care fraud in British Columbia and Ontario. I then address the question of how the compassion, or perhaps the deference, that we show to white-collar criminals can be transferred to so-called “street” criminals.

[1] The word location is used throughout this paper to symbolize various differences–difference in socio-economic position, geographical location, professional status, and so on.

[2] Edwin H. Sutherland, White Collar Crime: The Uncut Version (with an Introduction by Gilbert Geis and Colin Goff) (New Haven and London, Yale University Press, 1983) at 7. His 1939 speech is reproduced in Edwin H. Sutherland, “White-Collar Criminality” (1940) 5(1) American Sociological Review 1.

[3] Paul W. Tappan, “Who Is the Criminal?” (1947) 12 American Sociological Review 96.

[4] See Stuart Henry and Mark M. Lanier (eds.), What is Crime? Controversies over the Nature of Crime and What to Do about It (Lanham, Maryland: Rowan & Littlefield Publishers Inc., 2001) and Law Commission of Canada (ed.), What is a Crime? (Vancouver: UBC Press, 2004).

[5] Scott Greer and John Hagan, “Crime as Disrepute” in Henry and Lanier (eds.). What is Crime? 207 at 213.

[6] Henry and Lanier use the term “powerless.” I prefer and will use the term “less powerful” to recognize the agency that such individuals exercise. None of us are without power; but power is not distributed equally.

[7] Stuart Henry and Mark M. Lanier, “The Prism of Crime: Towards an Integrated Definition of Crime” in Henry and Lanier (eds.). What is Crime? 227 at 228.

[8] Henry and Lanier, “The Prism of Crime” at 227-232.

[9] For an exposé on how we waste criminal justice resources on activities that should not be criminalized because they do not cause serious harm to others, see Alan N. Young, Justice Defiled: Perverts, Potheads, Serial Killers and Lawyers (Toronto: Key Porter Books, 2003).

[10] While there is probably social consensus that car theft should be prevented, one can only wonder if the highly publicized car-bait programme used by the police in the Vancouver Lower Mainland (where bait cars are left in parking lots for the would-be thieves; and some are caught on tape wondering out loud whether they might be stealing the bait) might lead to a greater number of car-jackings, purse snatchings, park muggings, and home invasions. Increase in the latter crime is likely to increase fear of crime and fuel support for the crime control industry.

[11] Paddy Hillyard and Steve Tombs, “Beyond Criminology” in Paddy Hillyard, Christina Pantazis, Steve Tombs, and Dave Gordon (eds.), Beyond Criminology: Taking Harm Seriously (Blackpoint, Nova Scotia, Pluto Press, 2004) 10 at 12-14.

[12] Law Commission of Canada, What is a Crime? Challenges and Alternatives (Ottawa: Law Commission of Canada, Discussion Paper, 2003) at 15.

[13] Law Commission of Canada, 2003 at 20.

[14] Law Commission of Canada, 2003 at 39.

[15] Nathalie Des Rosiers and Steven Bittle, “Introduction” in Law Commission of Canada, 2004 vii at xxiii.

[16] Brenda L. Nightingale, The Law of Fraud and Related Offences (Toronto: Carswell, 1996) at 1-3 provides an example from 1703 where Holt, C.J. questioned, “Shall we indict one man for making a fool of another?”

[17] If the subject matter exceeds $5000, it is an indictable offence punishable by a term of imprisonment not exceeding fourteen years. Prior to 2004, the maximum penalty was ten years. If the value of the subject matter does not exceed $5000, the offence can be prosecuted by indictment (maximum term of imprisonment not to exceed two years) or by way of summary conviction.

[18] See Nightingale, The Law of Fraud; Law Reform Commission of Canada, Theft and Fraud Offences (Ottawa: Law Reform Commission of Canada, Working Paper 19, 1977); and Law Reform Commission of Canada, Theft and Fraud Offences (Ottawa: Law Reform Commission of Canada, Report 12, 1979).

[19] As the Law Reform Commission of Canada said about theft and fraud in 1977, “A law, it’s said, is what it does. Criminal law, for instance, isn’t merely what the Criminal Code says but also what is done by judges, prosecutors, defence counsel, police, prison officials and all who operate our criminal justice system. What all these do is law reform’s prime target;” Law Reform Commission, 1977 at 1.

[20] Consider McLachlin, J.’s discussion on how to determine the actus reus of "other fraudulent means" under section 380 of the Criminal Code in R. v. Zlatic, [1993] 2 S.C.R. 29 at para. 32: “Would the reasonable person stigmatize what was done as dishonest? Dishonesty is, of course, difficult to define with precision. . . . A use is ‘wrongful’ in this context if it constitutes conduct which reasonable decent persons would consider dishonest and unscrupulous.”

[21] Richard Ericson and Aaron Doyle, “Criminalization in Private: The Case of Insurance Fraud” in Law Commission of Canada (ed.), What is Crime? Defining Criminal Conduct in Contemporary Society (Vancouver: UBC Press, 2004) 99 at 119-120.

[22] Terms of Reference, April 30, 2004; www.petercory.org; accessed December 30, 2004.

[23] See Joan Brockman, “‘Fortunate Enough to Obtain and Keep the Title of Profession:’ Self-Regulating Organizations and the Enforcement of Professional Monopolies” (1998) 41(4) Canadian Public Administration 587 at 608-09.

[24] www.cpsbc.ca/ accessed January 12, 2005.