CRIME BETWEEN ORGANIZATIONS - A CASE STUDY OF MEDICAID PROVIDER FUNDS

• NCJ Number: 66070
• Author(s): D C VAUGHAN
• Date Published: 1979
• Length: 212 pages
• Sale Source: UMI Dissertation Services
• Publication Type: Thesis/Dissertation
• Language: English
• Country: United States of America
• Note: SPECIAL PRICES FOR ACADEMIC INSTITUTIONS. OHIO STATE UNIVERSITY - DOCTORAL DISSERTATION

Annotation

THE CAUSES OF CRIME THAT OCCUR BETWEEN PRIVATE AND PUBLIC ORGANIZATIONS ARE IDENTIFIED IN AN OHIO MEDICAID FRAUD STUDY, FROM WHICH RECOMMENDATIONS FOR SOCIAL CONTROL OF SUCH CRIME ARE ALSO DRAWN.

Abstract

IN 1977, REVCO DRUG STORES, INC. WAS FOUND TO HAVE COMMITTED FRAUD AGAINST THE OHIO DEPARTMENT OF PUBLIC WELFARE BY USING THE SYSTEM OF COMPUTER TRANSACTIONS BETWEEN THE TWO ORGANIZATIONS TO FILE FALSE CLAIMS OF DRUGS SOLD TO MEDICAID CLIENTS. REVCO RATIONALIZED ITS BEHAVIOR BY CLAIMING THAT THE SCHEME OF FALSIFYING CLAIMS WAS THE MOST COST-EFFECTIVE MEANS FOR OBTAINING MEDICAID FUNDS RIGHTFULLY OWED TO REVCO FOR DRUGS ACTUALLY SOLD TO MEDICAID CLIENTS, BUT FOR WHICH REVCO HAD NOT BEEN PAID BY THE OHIO DEPARTMENT OF WELFARE BECAUSE, CHARGED REVCO, OF UNRELIABLE COMPUTER OPERATIONS IN THE DEPARTMENT'S CLAIMS PROCESSING. THE OHIO STUDY CONFIRMED OTHER ORGANIZATION CRIME STUDIES CONCLUSIONS THAT THE NATURE OF ORGANIZATIONS (IMPERSONAL, BUREAUCRATIC, INSENSITIVE) FACILITATES THE RATIONALIZATION OF CRIME AGAINST ORGANIZATIONS. FURTHER, THE IDEOLOGICAL ATMOSPHERE WITHIN WHICH A BUSINESS FUNCTIONS MAXIMIZES PROFIT, OFTEN AT THE EXPENSE OF FREE COMPETITION AND LAWS DESIGNED TO PROTECT ORGANIZATIONS AND THE PUBLIC FROM PROFITEERING. THE DEVELOPMENT OF SOPHISTICATED COMPUTER SYSTEMS OPERATED BY HIGHLY SPECIALIZED PERSONNEL MAKES FRAUD PERPETRATED THROUGH THAT SYSTEM DIFFICULT TO DETECT. FURTHER, EVEN THOUGH ORGANIZATION CRIME MAY BE DETECTED, USUALLY AFTER LENGTHY AND EXPENSIVE INVESTIGATION, THE SANCTIONS IMPOSED UPON CONVICTION ARE RELATIVELY WEAK, BOTH BY STATUTE AND TRADITION. IMPROVED SOCIAL CONTROL FOR CRIME BETWEEN ORGANIZATIONS REQUIRES THE DEVELOPMENT OF SOCIAL CONTROL AGENCIES WITH HIGHLY SPECIALIZED PERSONNEL AND TECHNOLOGY EQUIPPED TO COUNTER AND DETER HIGHLY SOPHISTICATED ORGANIZATIONAL CRIME. HARSHER PENALTIES SHOULD ALSO BE IMPOSED FOR ORGANIZATIONAL CRIME, NOTABLY IN THE AREA OF FINES. A PERCENTAGE OF THE FINES COULD BE ALLOCATED TO ORGANIZATIONAL CRIME INVESTIGATIVE EFFORTS. APPENDIXES CONTAIN THE STUDY METHODOLOGY, A DISCUSSION OF THE EFFECT ON REVCO OF THE INVESTIGATION AND SETTLEMENT, AND TABULAR DATA. A BIBLIOGRAPHY IS ALSO PROVIDED. (RCB)