NHS fraud: Their hard-bitten Philip Marlowe image may be spurious, but the counter-fraud service is tracking down millions of pounds stolen from NHS coffers. Seamus Ward reports

Published: 16/05/2002, Volume II2, No. 5805 Page 24 25 26

On 10 April, police from three forces searched homes and businesses in England, Scotland and Wales as part of an investigation by the Serious Fraud Office into a suspected conspiracy to defraud the NHS.

Their investigation related to prices charged by suppliers for prescribed penicillin-based antibiotics and warfarin.

The police action was taken following an initial investigation by the Department of Health's counter-fraud service.More than three years after it was established, it is the highest profile example of the CFS at work.

Six pharmaceutical companies were involved in the investigation - Generics UK, Kent Pharmaceuticals, Regent-GM Laboratories, Goldshield Group, Norton Healthcare and Ranbaxy (UK). The SFO said after the raids that no arrests were made and no charges were imminent, but the investigation was expected to continue for some time.

Jim Gee, head of the CFS, insists that search warrants and surveillance are not the normal currencies of his department.He believes that there is a lot more to fraud-detection work than the image created by Raymond Chandler, creator of detective hero Philip Marlowe, played with typical hard-bitten cynicism by Humphrey Bogart in The Big Sleep.

Mr Gee, appointed in December 1998, is responsible for all counter-fraud work in the NHS.

Mr Gee came to the NHS after 17 years fighting fraud in London local government. As part of Lambeth council's anti-fraud team, he helped halve the£60m fraud bill in two years.

'It is not just about investigation or kicking in doors. It is about using technology, redesigning processes, deterrents, knowledge of the law and having the right professional skills to get a professional result.'

His methods appear to have paid off. According to the latest figures, the CFS has had 102 successful criminal prosecutions since it was set up, along with 143 civil and disciplinary cases. The CFS estimates that it has saved the NHS a total of£112m since it was established.

But as the Audit Commission estimated, in 1999, that fraud cost the service£150m a year there is still some way to go. The service is making good progress on some of its targets, such as halving prescription charge evasion by the end of 2003. It has already achieved a 41 per cent reduction, cutting the cost of evasion from£117m to£69m since 1999.

The cost of evasion of dental charges has also been reduced 25 per cent over the same period.

'We have also already reached the target of recouping£6m in primary care contractor fraud and have exceeded it.We have now received£7.45m, ' he adds.

The CFS has a budget of£5.5m, with 115 staff employed directly and around 400 by local health bodies. But it has still to complete its measurement of fraud in the NHS. 'When the figures are published, they will be highly accurate. The National Audit Office has looked at our methodology and is satisfied with it. The figures will be accurate to plus or minus 1 per cent - there is not another part of the public or private sector that I am aware of that measures that accurately. But that takes time, ' says Mr Gee.

The introduction of around 400 local and regional counter-fraud operatives has been a key element of the service's success, he says. Each has taken counter-fraud courses in areas such as detection, deterrents and the law. The training is accredited by Portsmouth University's institute of criminal justice studies.

The counter-fraud specialists are supported by finance directors, who have attended seminars organised by the CFS to improve their knowledge of anti-fraud work.

'There is no substitute for applying the right skills. Each part of the health service knows there is a specialist they can go to for advice to tackle these problems. Three years ago, that didn't exist, ' Mr Gee says.

When the CFS was set up, it was charged with placing a counter-fraud specialist in each health authority and trust. In practice, many acute and primary care trusts have found it more cost effective to buy in their anti-fraud services from local audit consortia rather than appoint their own counter-fraud specialist.

Ian Saxton, head of audit at North Derby and Sheffield Services, which provides anti-fraud services to 12 NHS bodies in the area, says it makes sense to tap into auditors' experience.

'It is not all about investigations. It is also about identifying weaknesses in systems and stopping the problem recurring. This is an area of expertise of auditors and why they should be in there.' Sharing services is also important, he believes.

'The nature of the work is such that sometimes there may be no specific projects and then it all happens and It is all hands on deck. The pooling arrangement helps smooth those peaks and troughs.'

Like Mr Gee, he believes tackling fraud goes further than simply reacting to problems.

'The role is a combination of things - working with the organisation to promote an anti-fraud culture throughout its staff, making them aware of the potential for it and the need to report continuously about the outcomes to deter future incidents, ' he says.

'You need to look at the system to prevent future occurrences and sharpen up the methodologies of detection. There is, for want of a better word, the policing side, where you go out and carry out specific enquiries.'

The CFS has delivered around 600 fraud awareness presentations, while the proportion of staff who understood that preventing fraud was their responsibility rose from 34 per cent in 1999-2000 to 74 per cent in 2000-01. Those who understood the types of fraud that can occur increased from 91 per cent to 95 per cent in the same period.

Mr Gee says it is important that the culture is starting to change. 'The biggest challenge initially was to win people's confidence.More people are aware of their individual responsibility and they are more often forthcoming about suspicions they have.'

Knowledge of the NHS battle against fraud is not restricted to honest staff. 'There is a new awareness among potential fraudsters that there is a serious risk of being detected by a professional investigation and it is likely that serious sanctions will be applied, ' he says.

Sanctions are a mix of prosecutions and, where appropriate, disciplinary action through the accused's professional organisation. Prosecutions and disciplinary measures are pursued concurrently to reduce the time a fraudulent professional can continue to practise.

Prosecutions fall into two categories - civil, where financial redress for a loss is sought, and criminal, where the CFS seeks a conviction.

Not everyone believes the culture is changing.

One trust finance director, who asked not to be named, said: 'The work done by the CFS and the local and regional reps has raised awareness, but there are still many staff who need to be won over.

Some still think of it as snooping or see it as an usand-them situation. I feel we are making progress, but it is just one of so many initiatives.'

And a PCT chief executive said: 'We all agree we should clamp down on fraud, but who will put in the effort to recoup a few thousand pounds when we are struggling to meet waiting-list and myriad other targets?'

However, Mr Saxton is upbeat. 'It is always difficult to know the wider picture, but I sense we are achieving results. It is not one of those things where you expect overnight success, but I think we are on the right course.'

Anti-fraud work is stronger when it is a team effort, he adds. 'While we do not have much contact with the national CFS, we enjoy a good deal of liaison and assistance from our regional team, based in Mansfield.

'We are in regular contact, advising them of the work we are doing, seeking assistance where appropriate, and they pass useful information to us from the centre.'

Collaboration is important at a national level.Mr Gee says the service works closely with many professional groups, including pharmacists' representatives, patient groups and finance staff body the Healthcare Financial Management Association.

The CFS also signed counter-fraud co-operation memoranda with the Association of Chief Police Officers in January.

Mr Gee says the memorandum with ACPO is a clear statement of how the CFS will work with the police. 'Co-operation is sometimes just a word, but we are trying to put flesh on the bones. Our people on the ground will do the basic investigation as they have specialist knowledge of the NHS and fraud, ' he says.

However, they will work with the police when property searches or arrests, for example, are required. 'It used to be the case a few years ago that the police had to spend some time learning about the NHS and how it works before they could start an investigation, but people in CFS have long experience of the NHS and a lot of counter-fraud skills.'

City of London commissioner of police Perry Nove says the memorandum establishes clear lines of communication between the NHS and the 43 police forces in England and Wales.

'The ultimate benefit that will accrue from improved efficiency in conducting joint investigations will be speedier and more certain prosecutions against those who steal public funds through fraud against the NHS, ' he adds.

Mr Gee says that the ACPO memorandum is the latest symbol of a more professional approach to tackling fraud. But he acknowledges that there is a lot of work to do.

'The reduction we have achieved in pharmaceutical patient fraud means it is now down to£69m - That is still a lot of money, ' he says.

But he is optimistic about the future success of the service. 'CFS integrates everything that happens rather than what sometimes happened in the past in the NHS, where there were areas of good work and some not so good.

'We have the ability to design policy and implement that policy on the ground, so there is a link between policy development and implementation. That has been essential to our effectiveness.' l RONALD GR ANT AR CHIV E ( THE I SLEEP ) Janis Courtney: put her family on the payroll In January, Janis Courtney, a manager employed by Community Health South London trust, was sentenced to three years in custody after being found guilty of defrauding the NHS of£125,000.

She had the budgetary responsibility for two evening nursing services and had added three family members and her partner to the payroll for hours that were not worked.

Concerns were raised within the trust, and following an internal enquiry the case was passed to the counter-fraud service.This revealed that all the time sheets submitted for her family members had been authorised by Ms Courtney either using her own signature or by forging the signature of another nurse who worked on the evening service.

During the investigation, the CFS and the fraud squad established that her nephew was on holiday in Cyprus and the Canary Islands when claims were made for hours he had worked.

All the defendants pleaded 'not guilty'at Southwark crown court, but after a five-week trial the jury returned a guilty verdict.The other defendants, who had each received between£15,000 and£17,000, were each given a six-month custodial sentence.

Michael Hampton: forged optical claim forms The local counter-fraud specialist at Bromsgrove health authority identified 1,551 forged optical claim forms submitted by Michael Hampton, a businessman from the Worcestershire town.

Though not qualified in his own right, Mr Hampton owned and ran an optical outlet in Bromsgrove, employing optometrists on a locum basis and paying them by the session.When arrested following a counter-fraud service investigation, Mr Hampton admitted falsifying several general optical service forms presented to him at interview.

He was charged with 29 offences of false accounting and had a further 847 offences taken into consideration.

He pleaded guilty to the 29 charges and on 5 December last year received a 12-month custodial sentence. Judge MacDuff also ordered Mr Hampton to pay compensation of£30,000, which would be paid back to Worcestershire health authority.

He added that a confiscation hearing at a later date would deal with the balance of the compensation due (£7,500) and costs amounting to£20,000 (£16,000 investigation costs and£4,000 prosecution costs).

Roland Hankin: blank invoices for fictitious companies Dorset Police and the CFS launched an investigation into Roland Hankin, a senior dispensing GP who operated two surgeries in Dorchester, when concerns were raised by his practice partner regarding financial irregularities.

Investigators found that since 1994, Mr Hankin had commissioned a local printing company to produce blank invoices in the names of nine pharmaceutical companies, seven of which were fictitious.

They established that 1,054 completed invoices recovered were false and only about 15 per cent of approximately 4,000 prescriptions they examined were genuine.The rest were for drugs and medical equipment that were not supplied to any patients.

He was found guilty at Dorchester crown court of 14 offences of obtaining money by deception and 36 counts of false accounting; 1,018 similar offences were taken into consideration and Mr Hankin pleaded 'guilty' to all charges.

Mr Hankin had defrauded the NHS of£676,000 and the court found he had benefited to the tune of£799,000.

In February 2001, he was sentenced to three years and nine months in prison.A confiscation hearing was held in June 2001 where Mr Hankin was ordered to repay£88,000 within three months; the remaining£711,000 was to be allocated from his pension.