Do US medics find fraud more rewarding than their vocation?

10 October 2012

Yesterday’s post was about the apparent acceptance of corruption in China – but human nature can be equally self centred in more developed societies.  Last week, raids in  seven large United States cities resulted in the arrest of 91 doctors, nurses and other medical professionals on charges of fraud totalling $430 million.  Offences included various forms of health care fraud, breaches of anti-kickback laws, identity theft, and money laundering,

The charges involved “…treatments and services that were either medically unnecessary or, in some cases, never actually rendered…”  ranging from home health care to the largest ambulance fraud scheme ever prosecuted.

Last  year the Federal Department of Justice  charged 323 medical professionals with more than $1 billion  of fraudulent claims, resulting in 175 prison sentences. Another $2.4 billion was recovered through action under the False Claims Act.

In less than four years the US Government has recovered more than $10.6 billion in improper medicaid claims by professionals 

The fraud surveys published in 2012 by the major international accounting firms indicate that respondents believe that is fraud is becoming increasingly more prevalent.  Some US insurance companied believe about 20% of claims are fraudulent. Identity fraud is on the increase. The scene is disheartening.

This week is fraud awareness week, in a range of guises. In New Zealand and Australia the risks of identity fraud are being emphasised. In some US states the emphasis is on insurance fraud.

 

www.telegraph.co.uk/news/worldnews/northamerica/usa/9588317/91-people-charged-in-400-million-Medicare-fraud.html

www.govexec.com/oversight/2012/10/feds-arrest-91-doctors-nurses-and-others-medicare-fraud/58624/?oref=skybox

http://en.wikipedia.org/wiki/Medicare_fraud

http://stopidfraud.com.au/press-room

Painting a grim picture of Chinese corruption

9  October 2012

The BBC has reported about a Beijing artist who has spent three years painting 1,600 portraits of officials recently jailed for corruption.  “They are all painted in a rosy pink, the colour of China’s 100 yuan bill as a symbol of corruption.”

There is no shortage of subjects.

Last year, the People’s Bank of China website reported that between 16,000 and 18,000 government officials had smuggled more than $120bn overseas between the mid-1990s and 2008. That works out to more than $6m per official.  Apparently posted in error, the report was soon removed.

Earlier this year, Premier Wen Jiabao warned that corruption was the greatest threat to the rule of the Communist Party.

The Chinese public read headlines about anti-corruption campaigns almost every day.  However, a Hong Kong based China- analyst indicated that it’s impossible to tackle corruption within the system without having independent bodies. “Top officials have stopped investigations and refuse calls for other senior officials to publish the assets of their families.”

Chinese are said to accept corruption as part of daily life. They know they have to pay bribes to get good medical treatment or win lawsuits in the courts.  The BBC reports that to go to a good state school in Beijing, bribes of  more than $10,000 must be paid to education officials.

www.bbc.co.uk/news/world-asia-china-19843176

Not too taxing for some UK civil servants

8 October 2012

The British Civil Service code of conduct imposes similar obligations to those in the State Services code of conduct. The ‘integrity’ duty is to put the obligations of public service above personal interests. Civil servants of course must act lawfully.

In May the UK Treasury reported that more than 2000 senior civil servants were being permitted by their employing agency to avoid taxation. Staff working exclusively for agencies were being paid under contractor arrangements although the rule was that anyone “on the books” and working only for the agency for more than six months, must be taxed as if they were an employee.  The Government warned departments that flouting taxation rules would result in budget resources being reduced by up to five times the amount paid to the contractor.

In addition to 2000 senior civil servants, others identified breaching the remuneration rule included more than 150 BBC executives and 55 contract managers in the NHS, who have been providing their services under contracting arrangements which minimise their tax liability.

In the UK employees pay up to 50 per cent of their salaries in income tax and together with the employing agency make National Insurance contributions. By contrast, contractors paid through “personal service companies” 21 per cent corporation tax, and are exempt from NI contributions.

Since August agency contract arrangements have been required to include conditions authorising the agency to check workers’ tax status, in recognition that something more than the obligation for integrity was necessary . “The public sector needs to demonstrate the highest standards of integrity”, but additional controls have proven necessary “to provide an effective disincentive to avoiding tax”.

HMRC announced last week that there has been a fivefold increase in the number of investigations into tax underpayments by senior officials. HMRC has “… gone from almost ignoring … breaches to getting tough ..”  but more than 50 officials are still using company arrangements to avoid income tax and National Insurance payments.

HMRC believes that it could recover up to £50m in unpaid tax going back several years, as well as the same amount in interest and penalties, by ending these suspected abuses of the system.

www.telegraph.co.uk/finance/personalfinance/consumertips/tax/9577017/HMRC-crackdown-on-freelance-tax-dodge-used-by-BBC-and-civil-servants.html

www.civilservice.gov.uk/wp-content/uploads/2011/09/civil-service-code-2010.pdf

 

Good FOI laws don’t make for good government

5 October 2012

Sometimes one wonders whether international indices make much sense.  The Right to Information Index is an illustration of why that may be. The RTI Index ranks the 93 countries that have legislation providing rights to access official information.  Freedom of information is logically regarded as a source of transparency in government, and that transparency leads to accountability and good government.

The latest RTI Index – which is compiled by Access Info Europe and the Centre for Law and Democracy – would seem to undermine any presumption that access to information feeds directly into good government.

The ten countries with the most comprehensive Freedom of Information laws seem to have just that – the best legislative provision.  In practice there seems to be no consistent value that those laws  add to the wellbeing of their societies. Countries with high scoring FOI laws almost without exception fall outside the top 10th percentile on most good government indicators.

In a strange misalignment, countries that have legislated for ready access to information, have regimes which are inimical to an effective media; six of them being in the lowest 15th percentile on the Press Freedom Index. They are not much better in providing a peaceful civil society, according to rankings on the Global Peace Index.  And on the Transparency International CPI only two countries are in the top 30th percentile.

Conversely, New Zealand with lead rankings on the CPI and Peace Index, and with a healthy level of press freedom,  barely makes the top 35th percentile on the RTI Index as the New Zealand Official Information Act lacks many of the features of more recent FOI laws elsewhere.

 

Right to Information Index

 

Press Freedom Index

Global Peace Index

Corruption Perceptions Index

Serbia

1

80

64

86

India

2

131

142

95

Slovenia

3

36

8

35

Liberia

4

154

101

91

El Salvador

5

161

111

80

Mexico

6

149

135

100

Antigua

7

No score

No score

No score

Ukraine

8

117

71

152

Croatia

9

68

35

66

Ethiopia

10

127

137

120

New Zealand

32

13

2

1

Australia

48

30

22

8

http://www.rti-rating.org/

http://www.visionofhumanity.org/gpi-data/

http://cpi.transparency.org/cpi2011/results/

http://en.rsf.org/press-freedom-index-2011-2012,1043.html

NZ pips Australia on another index

4 October 2012

Global Integrity website on which the Aid Transparency Index was posted earlier this week, has now republished the Web Index which was released by the World Wide Web Foundation in September. It has particular relevance as the Foundation is led by Berners-Lee who created the web.

The Web Index is regarded as the most comprehensive of surveys measuring the impact of the web. The 61 participating countries are evaluated on seven categories to determine the social benefit of the web to communities and citizens. Over 80 indicators relate to “…access, affordability, institutional and policy environment and social and economic utility…”

New Zealand ranks 7th overall on the Web Index, although because the social impact of the web is greater in New Zealand than almost anywhere else, poorer aspects like communications structure and economic impact are counter-balanced.  An aspect that stands out is that New Zealand internet speeds on average, are the slowest of all developed nations.

Just as the Aid Transparency Index ranks New Zealand (16th) ahead of Australia (18th) so on the Web Index New Zealand (7th ) ranks ahead of Australia (8th).

Web Index Top 10

1. Sweden
2. United States
3. Britain
4. Canada
5. Finland
6. Switzerland
7. New Zealand
8. Australia
9. Norway
10. Ireland

www.globalintegrity.org/blog/web-index-launched-indaba

www.publishwhatyoufund.org/index/2012-index/

Greater openness of New Zealand aid recognised

3 October 2012

New Zealand’s place on the 2012 Aid Transparency Index has improved on previous years.

The rationale for this index produced by PublishWhatYouFund, is that  “Transparency is essential if aid is to truly deliver on its promise.” The general assessment is that the efforts of those who give and receive, is undermined  because there is too little readily available information about aid.

Aid organisations are assessed using 43 indicators. The indicators are largely good governance matters, including measuring  information legislation, its operational effectiveness and openness, procurement strategies and whether the organisation publishes an annual report. As about a quarter of the 72 organisations involved are national governments, those with open government practices tend to rate better on the index.

The index has a 20 percentile scaling of “good”, “fair” “moderate”, poor” or “very poor”. This year, for the first time, two organisations have been rated as “good” – the World Bank and the U.K. Department for International Development. Nearly half of the organisations were rated as “poor” or “very poor”.

New Zealand in 16th place, was at the top of the “moderate” group on the index, moving up from 30th last year. Some of this appears to be from a recalibration of the index! But the commentary includes that. “…This is due to the publication of activity level information on their website in a format similar to the IATI standard, though it still needs some work to make it compatible and it is not currently published to the IATI Registry. New Zealand increased most significantly at the activity level, scoring on 60% of indicators; it only scored for one of 18 activity level indicators in the 2011 Index…”  (IATI it the International Aid Transparency Initiative).

Recommendations include that New Zealand should also consider joining Open Government Partnership. Interestingly, PublishWhatYouFund is co-located in the newly established OpenGovHub in Washington with Global Integrity, an NGO which is supporting implementation of the Open Government Partnership. The Indaba platform operated by Global Integrity was used for the index – putting into practice the coordination across NGOs which motivated the establishment of the OpenGovHub.

www.publishwhatyoufund.org/index/2012-index/

www.publishwhatyoufund.org/

www.publishwhatyoufund.org/index/2012-index/new-zealand/

http://foi-privacy.blogspot.co.nz/2012/10/australian-foreign-aid-transparency.html

www.developmentgateway.org/news/announcing-opengov-hub

www.globalintegrity.org/

Success Profile for aspiring Public Service leaders

2 October 2012

Last week State Services Commission outlined how it will coordinate building a pipeline for promising senior leaders and future Public Service chief executives. More information about the programme is to be published this month and next.

There is an acknowledgment that the leadership development provisions in the State Sector Act 1988 were not a success. The programme anticipates the change in emphasis in the State Sector Amendment Bill which will give the State Services Commissioner responsibility  “…for creating and implementing a strategy for the development of senior leaders in the Public Service…”  The Bill proposes a flexible deployment of senior leaders with SSC designating positions in departments as key positions which must be filled by agreement between the relevant departmental chief executive and the State Services Commissioner.  A chief executive’s independence in matters relating to appointments would be subject to this requirement pertaining to key positions.

The SSC framework for senior leader career development involves a leadership success profile. The profile model identifies leaderful capacity being the delivery of results – through transformation, vision, people and self.

The ”self” portion of the leadership success profile includes an Integrity element… it is just a bit confusing in its specification.   The structure is engineered around providing better Public Service leaders but refers to State sector standards. The aspiration is that State sector integrity standards are maintained.  Is this intentionally broader than the State Services standards, which the State Services Commissioner has set as Head of the State Services and which even have a less demanding application to the non Public Service parts of the State Services?  If so this implicitly prioritises the status of the Cabinet Manual integrity prescription and integrity guidance issued by the Office of the Auditor General, both of which address a wider audience than the State Services.  This could be considered a matter of insignificance because the Cabinet Manual incorporates the language of the Commissioner’s standards. What is probable is that it is just a language slip with SSC not using the precision expected when the owner of the machinery of government refers to State sector and State Services.

Cabinet Manual prescription, under the Principles of public service  (lower case p and s) is that “…Employees in the state sector must act with a spirit of service to the community and meet high standards of integrity and conduct in everything they do. In particular, employees must be fair, impartial, responsible, and trustworthy….”

 

www.ssc.govt.nz/senior-leader-development#related-resources

www.ssc.govt.nz/sites/all/files/ssrpf-pre-introduction-briefing.pdf

www.ssc.govt.nz/leadership-success-profile

http://cabinetmanual.cabinetoffice.govt.nz/3.50

 

Bo bows out

1 October 2012

A large percentage of the Chinese population was on the move over the weekend as city workers travelled to their rural homes for this week’s National Day holiday. Someone who won’t be going anywhere is Bo Xilai the former head of the Communist Party in Chongqing.  On Friday when the Xinhua news agency announced that the Party Congress will meet from 8 November, the news was also released that Bo had been expelled from the party.

The Annual Party Congress for several years has had a keynote speech about the importance of fighting corruption, and punishing officials who abuse their positions.  This year the Congress will see the change of party leadership which occurs every ten years.  The announcements are a signal that Bo, “… ‘princeling’ son of a revolutionary leader…” is no longer a player among the party power brokers and that the Premier will not be restricted in a speech condemning corruption by “unfinished business” regarding Bo, who has been in the news for much of the last year.

The statement about Bo is that he had “…seriously violated discipline throughout his career, including abuses related to a murder case involving his wife, taking vast quantities of bribe money and having or maintaining inappropriate sexual relations with multiple women….”

The report made no comment about how someone who had been a very senior party official could have been seriously violating discipline “throughout his career”.  Which perhaps says something about the willingness of the Ministry for Supervision, which is responsible for maintaining standards in government, to challenge senior party members.

The editor in chief of China Business News commenting on the issue said “… Don’t investigate and everything looks heroic. Investigate and everything looks criminal. To investigate or not investigate, that is the question…”

“Corruption … is an increasing problem in China as numerous government officials …have been photographed wearing expensive luxury items over the past year. A recent case is that of … head of Shaanxi Province’s Safety Supervision Bureau, who was sacked last week after photographs of him wearing five different luxury wristwatches on different occasions, including a Vacheron Constantin model worth up to 400,000 yuan ($63,400), surfaced on Sina Weibo”.

www.reuters.com/article/2012/09/28/us-china-politics-bo-idUSBRE88R0HS20120928

http://ph.omg.yahoo.com/news/luxury-orientation-classes-fight-corruption-china-162256994.html

Can agencies investigating Dotcom be trusted?

28 September 2012
 
Whether an unfortunate coincidence, or as some perceive, the result of trying too hard to impress United States interests, several agencies have apparently acted improperly in their investigation of Kim Dotcom. Some commentators have linked the Megaupload affair with declining trust in institutions, implying that the trustworthiness of State Servants is in question. Speculation of that kind is not supported by research.
 
The last UMR Mood of the Nation report on confidence in institutions found that in 2011 “… for the first time the Police took over from GPs as the institution New Zealanders have greatest confidence in. 72% now feel confident in the Police, up 5% on 2010 and up 19% since 2005. Confidence in GPs … has fallen by 6% since 2007 … Primary schools take out third place (up 5% to 64%), followed by the military (up 7% to 61%) …”
 
By comparison, “… confidence in small business has dwindled markedly over the last few years. 48% now feel confident in small business, down 16% since 2006. Over that time, small business has fallen from 3rd to 7th place…”
 
Confidence in the Public Service increased by 5% over the previous survey, and remained 7% higher than confidence in big business.
 
A survey of trust and confidence in the Police released earlier this month showed further strengthening of confidence “… At 77 percent, New Zealand Police’s overall trust and confidence rating would also be the envy of many overseas police forces … Police scored 82 out of 100 for satisfaction with police service delivery ..”.
 
The Kiwis Count Survey published in August confirmed this growing public satisfaction with government services. “…The overall service quality score for public services between February and June 2012 was 72, an increase over the 2009 score of 69 …”
 
Another perspective is the findings of the Performance Improvement Framework reviews being conducted across the State Services. Yesterday the review results for the Police and the Department of Corrections were published. Both show more areas of strength than many other agencies, although the Ministry of Social Development and the Inland Revenue Department remain the best rated by reviewers.
 
This growth in confidence has taken place despite “fiscal constraints” and an ambivalence about enforcement agencies.
 
Yesterday the Guardian recognised the achievements of the former head of the British tax office. Parts of the article probably have equal relevance to agencies exposed by the Kim Dotcom spotlight.
 
“….Tax officials need to spend time with recalcitrant tax payers and other sinners – and have done so since biblical times. That puts them in the firing line, in a much more direct way than other civil servants. For that they deserve credit, even if it means building around them checks, balances and scrutiny….Tax officials need to fend off the silky attack of highly-paid QCs retained by recalcitrant tax payers. That means they need to be super able and highly adaptable …”
 
 
 
 
 
 
 

Revisiting integrity training – a new resource

27 September 2012

 

The practice in the New Zealand State Services has always been that managers are responsible for integrity leadership.

 

Managers at all levels of an agency are expected to give effect to the “6 Trust Elements” – to ensure there are standards, that their staff are trained on those standards, that work practices embody those standards, that as managers they model those standards, that they take decisive action when there are breaches of standards, and that their staff are familiar with the consequences of breaching standards.

 

The State Sector Act establishes the overarching framework – the State Services Commissioner has set standards of integrity that apply to agencies and their employees – and in Public Service departments, chief executives have additional statutory duties to imbue the spirit of service, and to ensure that all employees maintain proper standards of integrity, conduct, and concern for the public interest.

 

The Bill amending the State Sector Act, introduced into Parliament in late August to give effect to the Better Public Services programme, will not affect these responsibilities. The powerful sentiment of imbuing the spirit of service remains although it may be at odds with the plain English mantra of law drafters. ( It moves from being part of the Long Title, to becoming a specified purpose of the Act.)

 

Nothing will change the focus that all officers with supervisory roles must give to invigorating the “6 Trust Elements”, and the duty of all who work for government to serve with integrity and to subordinate personal interest to the public interest where there is potential for conflict.

 

SSC guidance about integrity obligations, accessible on its website, is unchanging in its relevance. However, managers, keen to convey a sense of the contemporary in their training, may prefer to reference newly minted material.

 

An excellent training resource recently published in the United States could meet that need. Although targeting US local governments, much of the content written by Robert Wechsler, the Director of Research at City Ethics – a “good governance” NGO – has universal application.  Local Government Ethics Programs: A Resource for Ethics Commission Members, Ethics Reformers, Local Officials, Attorneys, Journalists, and Students is published with Creative Commons Attribution-Noncommercial 3.0 Unported License, to encourage its use, and attributed reproduction for training purposes. See the bottom link. ( And incidentally, I note that a comment from an Integrity Talking Points entry has been included.)

 

www.beehive.govt.nz/release/state-sector-reform-bill-introduced

http://ssc.govt.nz/code-guidance-stateservants

http://webcache.googleusercontent.com/search?q=cache:http://www.ssc.govt.nz/sites/all/files/integrityandconduct-survey2010-findings-summary.pdf

www.cityethics.org/files/lgep1-0%20-%20Robert%20Wechsler.htm#Conflicts_of_Interest