Three years ago racketeers in Nigeria tried to get their hands on NHS cash with a scheme that seemed too good to be true. They wrote to a trust claiming to represent the Nigerian National Petroleum Corporation, a reputable company that was not involved in the attempted deception. The letter said the company wished to move about£19m out of Nigeria using the trust's bank account. In return for providing their account details, the trust would receive more than£7m.
The trust, which the NHS Executive refuses to name, saw through this poor attempt at fraud - the letterhead was obviously photocopied and the English rudimentary.
Unfortunately, most of the swindles perpetrated against the NHS have proved more difficult to spot.
Fraud is estimated to cost the health service between£100m and£175m a year. But, according to the Audit Commission, NHS bodies in England and Wales uncovered deceptions worth only£1.4m in 1996-97 and£2.6m in 1997-98.
The Department of Health hopes to improve detection through the counter-fraud directorate, set up just over a year ago. The government is already committed to reducing evasion of prescription charges by 50 per cent by the end of 2003. The directorate also aims to prevent contractors committing£9m of prescription fraud and to recover£6m in fraudulent claims by the end of 2002.
Earlier this month health minister John Denham announced that from October 5, children and people over 60 would be asked to provide proof of age in order to claim a free prescription.
The head of the directorate is Jim Gee, who is something of a legend in public sector fraud busting. Following a degree in politics and economics at the London School of Economics, he spent 17 years fighting fraud in London local government. After spells at Islington and Haringey, he joined Lambeth council's anti-fraud team. There, he helped halve the£60m fraud bill in two years and in some key areas slashed two-thirds off the council's losses.
Mr Gee's credentials are impeccable, but he has a tough job on his hands.
'There is a substantial amount of work to be done in the initial stages to establish the current strategy and the programme of ac t ion that needs to be taken forward , ' says John Flook, finance director of County Durham health authority. 'Work needs to be done to change the culture over the next couple of years. When the new systems are in place, hopefully we will see a much improved situation.'
There are simply too many ways to deceive the health service. Much of this stems from the way many of its professional groups are paid. Contractors, such as doctors, dentists, opticians and pharmacists, can make a lot of money if they are unscrupulous. Pharmacists have altered prescriptions so they will be reimbursed for medicines that have not been dispensed. And the DoH estimates that one GP claimed£43,000 for night visits that were never made.
Last month Melvyn Megitt, a dentist from Sale, Cheshire, who was earning£600,000 a year by seeing 150 patients a day at one point, was struck off the dental council register for defrauding the NHS. Announcing the decision, Dame Margaret Seward, president of the General Dental Council, said he had shown 'lamentable lack of skill' with his patients, implemented inappropriate treatments, and in some cases damaged patients' appearance.
'This was a sustained and deliberate course of dishonest conduct which had the effect of increasing Mr Megitt's gross receipts and defrauding the NHS, ' she said.
Primary care contractor fraud is compounded by patients who falsely claim that they do not have to pay the prescription charge - around 90 per cent of forms bear claims by patients that they are exempt. In fact, only about 85 per cent of items dispensed should be exempt.
'I don't think I could say the NHS has been good at detecting fraud and it has been less good at recovering money that has been taken out of the system by fraud, ' says Mr Flook.
'Historically, the NHS has not considered counter-fraud aspects when it has devised new payment and remuneration systems. And it hasn't worked to make staff more aware of their role in deterring and preventing fraud, so as a community the NHS has not given fraud a sufficiently high profile.'
Peter Jay of Knebworth-based fraud specialists Medicolegal Investigations says NHS anti-fraud measures have, until now, been ineffective.
'I am sure that with Mr Gee's vast experience he will be able to invoke mechanisms that are effective, ' he says. 'It is no good sitting talking about fraud; you have got to do something about it. You won't get rid of fraud by threatening to implement various procedures - you have got to go out there and prove that the chances of being caught have never been greater.'
It seems that the bulk of fraud against the NHS takes place in primary care, but there is concern that other high-risk areas are being ignored.
'Certainly primary care has received more attention than trusts in the past few years, but we need to remember that significantly more money is spent in community and secondary areas than in the primary care sector, ' says Mr Flook. 'While controls systems for the bulk of the expenditure in salaries and wages will be of a high quality, there are still vulnerable areas involving significant amounts of money. We shouldn't assume primary care is the biggest area just because we have focused on it.'
He acknowledges that fraud in hospitals can be particularly difficult to detect. 'Until you know there is a problem you can't start to analyse it.
'For example, years ago I worked for the General Medical Council's solicitors and had a case involving a consultant who had been fiddling expenses for domiciliary visits. He was dealt with in a high-profile case in the area.
'The regional health authority's director of finance called me nine months later to say that in the six months following the case, claims from consultants had dropped by just over half a million pounds.'
Detection, prosecution and recovery of funds will be the counter-fraud directorate's watchwords. It will first try to assess the level of fraud against the NHS, then it will chase the perpetrators.
The directorate's counter-fraud operational service will include a team of investigators in each of the eight English regions, two specialist teams covering dental and prescription fraud and a 'flying squad' that will react quickly to major incidents.
The directorate will begin training a counter-fraud expert in every HA and trust in England by spring next year. More than 500 NHS staff will be instructed in basic counter-fraud skills, including speedy detection, the law and deterrence.
The courses can be taken at foundation and advanced levels, and are recognised and accredited by the Institute of Criminal Justice Studies at Portsmouth University.
Other anti-fraud measures have already been implemented. In the past, the Prescription Pricing Authority checked only a small, random sample of prescriptions for false claims. But now its work has become more focused. A new prescription form was introduced in April, which has a checklist on the back for pharmacists to fill in. It asks whether a patient has presented proof that they qualify for an exemption. The PPA focuses on prescriptions where the patient has not been able to provide confirmation of their eligibility.
On paper at least, the new measures appear to be a strong response to fraud. But there is some disquiet about the strategy, particularly with regard to accountability and practicality.
NHS finance directors and chief executives are statutorily accountable for anti-fraud measures and detection in their organisations, but it appears that the counter-fraud directorate will investigate even where the suspected deceit is of little monetary value. It is unclear whether, say, an HA chief executive will have a role in an inquiry into a suspected local prescription racket.
And with the counter-fraud directorate taking on the bulk of HAs' anti-fraud work, is there a need to train counter-fraud specialists at HA level?
Mr Jay, a former officer with the Metropolitan Police, has reservations about the wisdom of training 500 local fraud investigators.
'It is difficult to gather evidence if you don't know how to do it. Without practical experience, those charged with the responsibility of investigating fraud will not understand interview techniques and spend most of their time worrying about 'what ifs' - such as: 'Will I defame someone?' In the Metropolitan Police we used to say it takes at least eight years to train a detective. You need a sixth sense, an ability to go with a gut feeling, to explore every avenue and not be deterred by brick walls that are placed in your way.'
He adds that in his experience in-house investigators do not always make the best detectives. 'Most tend to look for a reason why it couldn't have happened rather than why it did happen. They tend to pre-judge a situation and try to make the evidence fit their own beliefs instead of going into something with an open mind.'
Mr Flook says the new directorate will have to win the confidence of NHS staff. 'This is a major change in the way the NHS handles its counter-fraud activities, and we need to be certain that the arrangements are going to be effective. It is absolutely essential that those working in the service, in trusts and HAs, have full confidence that the arrangements will lead to an improvement.'
There are those who would question the need to spend£4m countering fraud in the NHS when much of it involves very small sums. The penalty for non-payment of a prescription charge is capped at a mere£100.
Mr Jay says the volume of small claims may make it difficult to catch and prosecute everyone. 'If you have fraud totalling£100,000, it may involve 20,000 cases of£5 each. 'If people are prepared to prosecute the£5 cases in order to prove that we are going to secure£100,000, then that's wonderful. But there are those who would think that it is not worth it.'
It may well be that successful prosecution of high-profile cases, such as the consultant who fiddled expenses, will be enough to deter small-scale deceptions, he adds.
'When an individual piece of fraud is exposed, the measures taken in response to it need to reflect the scale and the seriousness, ' Mr Flook says.
'And in doing that it is important to remember that the figures quoted when cases come to court are often only a small part of the total. They are often specimen charges.
'The occasional addition to travel expenses is different to the systematic and planned defrauding that may go on in prescribing or ophthalmic fraud, which can involve hundreds of thousands of pounds. They each need a response - each is dishonest, but the response needs to be measured.'
The DoH aims to have a dynamic, coherent anti-fraud strategy up and running within a few years. It hopes its network of local and national fraudbusters, working closely with auditors, NHS staff and the public will break the culture of petty and large-scale theft from the health service.
But if the problem is as widespread as the government believes, it is surprising that more has not been done before now to tackle NHS fraud head on.
The investigator: 'a melange of identities' 'There's no sign of a trilby or raincoat, not an inkling of the shifty, nervous appearance typical of film noir or Raymond Chandler types.
'I'm a booted and suited 35-year-old from south London, who looks as if I'd be more at home behind a desk in a bank or insurance company.'
So says fraud investigator Anthony Benson, who says he has uncovered millions of pounds' worth of deception in the health service and the private sector. But the private eye sometimes goes to great lengths to hide his identity.
'I suppose the unique aspect of my work is the melange of identities that I take on. One day I may be investigating a dentist suspected of fiddling the figures. And the next I may be a 'salesman' at an international exhibition attempting to obtain proof of intellectual property infringements worth millions.'
Mr Benson, who has a military background, immerses himself in his roles.
'The people that I become are real to the last detail. I alter my appearance to become another person. I use costume designers, make-up artists, role-play experts, translators and digital communications and recording devices. It's great therapy.'
During one investigation, he was part of a team that conducted covert surveillance on a dentist over five years. 'The dentist claimed to be fitting and repairing twice as many braces as any other dentist in the UK, ' he says.
'On inspecting the figures, I thought he was an industrious fellow, but as soon as we brought it to the attention of the authorities he decided to cash in his chips and, in the great tradition of public service, take early retirement. When the hearing started, his defence was that he could not attend because of health reasons.'
In a separate inquiry he visited 20 dentists for a check-up and found some to be less than scrupulous.
'The first told me that nothing needed doing, another said I needed five fillings, a wisdom tooth extracted, scale and polish and a replacement crown.'
He has uncovered fraud in other areas of primary care - opticians who have claimed for glasses not supplied or those who have added tinted lenses to a prescription after it has been signed by the patient, for example. 'Opticians are ripping off the system to the tune of approximately£25m a year, ' Mr Benson says.
'These professionally qualified vampires are everywhere and suck the NHS dry.'
The culprit: jailed and struck off In August, the General Medical Council struck off a GP who stole NHS prescription pads and sold them on to drug addicts.
Dr Nicolaas Grobler, 63, of Oswestry, Shropshire, had admitted six charges of theft and deception at Knightsbridge Crown Court in May 1998, including two charges of stealing prescription pads.
As well as stealing the pads Dr Grobler, who had been working as a GP in west London, had dishonestly obtained goods.
He was sentenced to a total of three years and six months in prison but was released in June last year, having served a total of 21 months in prison.
This included time spent in a Dutch jail awaiting extradition to the UK after he had absconded to the Netherlands.
The GMC found that he had also submitted false documentation when he applied to register as a doctor in the UK. The council's professional conduct committee said: 'Doctors are expected to be honest and trustworthy.
'This committee takes a very serious view of dishonesty by a registered medical practitioner since it undermines the trust which the public places in the profession. It is clear that Dr Grobler cannot be trusted.'
Dr Grobler has appealed to the judicial committee of the privy council against the GMC's decision. As HSJ went to press, no date had been set for the appeal hearing.
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