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VOLUME 2 : ISSUE 3 || July 2020 ||

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4 www.whiteblacklegal.co.in ISSN: 2581-8503 WHITE COLLAR CRIME IN HEALTH CARE SECTOR (Submitted By : Adv. Richa Kumari Singh)

DECLARATION This article is based on the topic White Collar Crime In Health Care Sector, submitted by Richa Kumari Singh, for the course publishing it at Kalinga Institute of Industrial Technology, it is my original work carried out under my hard work and researching ability. The research work has not been submitted elsewhere for award of any publishing certificate or any other purpose whatsoever.

The comments made in this project on any policy/legislation are my own. The material borrowed from other sources and incorporated in the research has been duly acknowledged.

I understand that I could be held responsible and accountable for plagiarism, if any, even if detected later.

DATE : July 31, 2020

Name of the Researcher: Richa Kumari Singh

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ABSTRACT White-collar crime refers to financially motivated, non-violent crime committed by businesses and government professionals. White collar crime bleeds over into corporate crimes because crimes such as fraud, forgery, insider trading, bribery, computer crimes are more available to the white collar employees, these are usually committed by government employees and professionals, Though White Collar Crime is almost in every corporate institution be it Insurance Company, but the main matter of concern for the author is White collar crime in Health Care sector.

White Collar Crimes that can take place in medical and health care sector:-  Making false medical certificates by the doctors  Fake and intended prolong the treatment in order to increase the bills  Sex determination of child by the doctors on the compulsion of the patient to gain money  Sale of sample medicines which are not allowed to the chemists The rate at which white collar crimes are increasing has become a matter of concern globally. It has been found that the detriment that white collar crimes cause to society is much more than other forms of crime, it is impacting a large no of people in the society as well. This can be prevented by uploading the data of fake doctors so that patient can be more careful, or by visiting each doctor on the ground to their registration biometric details along with the copies of their medical degrees.

Presently India does not have any special law regarding white collar crime, presently IPC has certain provisions which keeps an eye on this topic.

Indian government must improve governance and take strict action against the offenders. Comptroller Auditor General is showing the way forward, the need of the hour is for political parties to have the spirit to clean up the mess. The private sector must implement fraud prevention measures and focus on ethics to reduce frauds. Both sectors have to collaborate to minimize fraud risks in India.

MAIN MANUSCRIPT “Let not the mighty and rich think that courts are their paradise and in the legal arena they are the dominant players”. (Supreme Court of India)1

1 Rathinam v. State of Tamil Nadu &Anr, (2011) 11 SCC 140.

6 www.whiteblacklegal.co.in ISSN: 2581-8503 INTRODUCTION The intent of this research paper is to analyze the various medical and health care frauds which are prevalent in the society for so long and to interconnect it with white collar crimes, to understand the scenario and to put forward the measures which can be taken to eradicate such practices. People trust the medical practitioners and if any malfunctioning takes place there the trust and security will fall down.

HISTORY Society is changing very frequently also the law is changing with it, we Have seen that of late the activities of stat have multiplied to great extent. State is no longer a police state and this shift from police state to welfare state has contributed in large increase in the state activities. It has opened a new vista for state activity. These changes have had their effect on the penal laws2.

A few types of crime have become obsolete and many new form of crime have taken different dimensions in the present scenario.

Dating back to history, it is an undaunted fact that ever since human being stated living together commission of crime has erupted, White Collar Crime is not a new phenomenon. In the ancient and Medival literatures of India felt that there was an age when ‘Dharma’ prevailed in perfection but gradually ‘Adharma’ made its headway giving rise to the tendencies like theft, fraud, etc.

The history of India’s first major corporate crime dates back to 1957, when LIC v. hari Das Mundhra3 had shaken the country with then government constituting Justice Chagla commission of inquiry had made certain critical observations regarding dubious dealings in the public sector institutions. LIC bought 1.24 crores of fraudulent stocks in six companies owned by Haridas Mundhra, this was the largest investment of LIC’s history, later on Harshad Mehta’s Scam, Satyam Scam, Sahara fraud had come under spotlight forcing the central govt. to formulate laws for ethical corporate governance4.

MEANING OF WHITE COLLAR CRIME (WCC) These are the non-violent crimes that involve deceit, corruption, and breach of trust usually out of greed. White collar crime bleeds over into corporate crimes because crimes such as fraud,

2 Mahesh Chandra, socio economic offences24(1979). 3 https://indiankanoon.org/doc/1450436/, last visted 15.07.20. 4 Mohit Kar, White Collar Crime – A fast emerging trend in India, Centre for Criminal Law, NUSRL, Ranchi.

7 www.whiteblacklegal.co.in ISSN: 2581-8503 forgery, insider trading, bribery, computer crimes are more available to the white collar employees, these are usually committed by government employees and professionals.

FEATURES OF WCC 1. WCC are crimes committed by the people of high class and status in the society such as government officials, doctors, advocates, charted accountants and other professional’s businessmen etc. and not by a layman and hardcore criminals. 2. Means of crime differ from the traditional crimes as fraud, misrepresentation, adulteration, malpractices, irregularities etc. 3. These are the crimes committed by means and planned conspiracies without any feelings and sentiments. 4. The victim of WCC is normally the major section of the society or even the entire nation besides the individual who has done that. 5. The financial losses from the WCC to the society are probably greater than the financial losses from burglaries, robberies and larcenies committed by persons of lower socio- economic class.

WHITE COLLAR CRIME AS A TREND High profile fugitives who made their fortune using public money have fled with the proceeds of the crime to overseas countries. There are many instances like Vijay Mallya, Nirav Modi, Mehul Choksey and many more. As things are emerging, White Collar Crime is spreading its wing not only in the developed world like USA, but in emerging economies like India as well.

WHITE COLLAR CRIME IN HEALTH CARE SECTOR / MEDICAL PROFESSION Health care fraud is not a victimless crime. The diversion of funds due to fraud drives up the costs of providing a full range of legitimate medical services and may foster mechanisms designed to recoup these losses. These efforts may result in reduced benefit coverage, changes in eligibility for programs such as Medicaid, higher premiums for individuals or their employers, or higher copays. Physicians may perform unnecessary procedures to increase reimbursement, compromising patient safety. When medical providers bill for services never rendered, they create a false medical history for patients that may later cause them difficulty in obtaining disability or life insurance policies. An inaccurate medical history may also influence treatment decisions and allow some

8 www.whiteblacklegal.co.in ISSN: 2581-8503 insurance companies to deny coverage based on a previous medical condition. Health care fraud also tarnishes the reputation of the medical profession and raises questions about the ethics governing the conduct of all physicians5.

RESEARCH ISSUE/RESEARCH QUESTION 1. What kind of health care frauds are prevalent in the society? 2. What is the extent of the harm that this particular crime does in the health care sector? 3. What can be the measures which can be taken to prevent health care frauds? The rate at which white collar crimes are increasing has become a matter of concern globally. It has been found that the detriment that white collar crimes cause to society is much more than other forms of crime. Moreover, India is a developing nation and so an unprecedented increase in white collar crime hampers its image along with being a hazard in the growth of its economy.

Moreover, white collar crimes cause emotional traumas, not only to the victims of the crime but to the society at large. Where the victim is not able to bear the expenses of white collar crime that he had evidence, the society starts losing faith in the authorities. If the authorities at higher positions, who have enormous powers, start using it in a wrongful way, then who else will the citizens trust6.

White collar Crimes that can take place in medical and health care sector:-

 Making false medical certificates by the doctors:-Firstly the people who seek for such fake medical certificates are at fault, because if we will ask them to get a fake medical certificate and in return we are giving them monetary benefits it will create a tradition of such practices in the society. Willfully and recklessly issuing a false or fake certificate is a professional misconduct as per Indian Medical Council, punishable by striking the name off the Medical Register. The Delhi Medical Council (DMC) has handed out bitter pills to five of its own doctors for unethical practices, in a recent crackdown, it has suspended the five medical practitioners in the city for allegedly issuing fake medical leave certificates for as long as 11 months7.

6, G.Nagaijan, J.Khaja Sheriff, “White Collar Crimes in India”, International Journal of Social Science & Interdisciplinary Research (IRJC) Vol.l, Issue 9 September 2012, page no 159-161. 7 https://www.mciindia.org/CMS/rules-regulations/code-of-medical-ethics-regulations-2002, last visted 0n 08.06.2020.

9 www.whiteblacklegal.co.in ISSN: 2581-8503 Rule 7.7 of the Medical Ethics Regulation 2002, specifically mentions that any legal practitioner found of giving, signing upon any such request a fake medical reports or certificates shall be debarred from his or her practice, registration will be cancelled.  Fake and intended prolong the treatment in order to increase the bills:-The doctors are doing fraud with the patients as they make fake and intended prolonged treatment in order to extort money from them and to increase their bills, and to gain profit.

 Sex determination of child by the doctors on the compulsion of the patient to gain money:- Rule 7.6 of the Medical Ethics Regulation 2002, mentions that sex determination test shall be undertaken with the intent to terminate the life of a female foetus developing in her mother’s womb, unless there are other absolute indications for termination of pregnancy as specified in the Medical Termination of Pregnancy Act, 1971. Any act of termination of pregnancy of normal female foetus amounting to female foeticide shall be regarded as professional misconduct on the part of the physician leading to penal erasure besides rendering him liable to criminal proceedings as per the provisions of this Act.

 Sale of sample medicines which are not allowed to the chemists:- Basically sample medicines are those medicines which are not intended to be sold by the drug representative, whereas it is distributed for free to patients and that too by the registered and licensed drug seller to promote sale of drugs, Sample medication is intended to be provided to a patient when the patient is being asked to start a new medication. It is a cost effective way to evaluate if the patient can tolerate a new medication and/or whether the new medication will be effective for the patient. Sale of sample medicines by the chemist shops and unregistered pharmacy are not allowed by the Drug and Cosmetics Rules 1945.

Medical fraud differs from the other kinds of white collar crime in that it can cause irreparable physical harm to the victim, as opposed to mere financial losses. Due to tax regulation and a lack of stringent application of even those, many unqualified people lie about their credentials, in an attempt to dupe innocent patients because these quacks often lack basic medical training, their actions usually have disastrous, sometimes fatal, results.

10 www.whiteblacklegal.co.in ISSN: 2581-8503 Indian Medical Council Act, 1954 This Act is for the matters connected to modem scientific medicine. The Indian Medical Council and the State Medical Councils are formed under the Act as regulators. It regulates and recognises the Universities that grant medical qualifications to people for quacks practising modem medicine, complaints can be lodged under section 15 of Indian Medical Council Act, punishable with one year imprisonment or fine of 01 thousand rupees. A person can also be removed from the Indian Medical register for not having the requisite-qualification. An Indian Medical Register has to be maintained which contains all the names that are enrolled on any State Register. Although, the registrar’s ‘satisfaction’ as to the person’s medical qualification is required, the registrar may almost never have looked into the person’s qualification but only accepted the State register. The Council can constitute an Executive committee for any special purpose under section 98.

HOW HEALTH CARE FRAUD WORKS? The medical practitioners are often found involved in issuance of false certificates, carrying out illegal abortions, selling out sample drugs and medicine, even in some cases adulterated drugs and medicines to the patients. Dilatory tactics are often adopted by them in providing treatment to their patients with a menswear to extract huge amount of money, no matter the person has good practice. Some of the notorious instances are like that of Nithari case, where the medical professionals put up before the society the optimum level of brutal character they can reach for the crave of making money. Misleading and fake advertisement claiming absolute cure is also one of the frequent malpractices being carried out in the medical profession. The problem lies in the fact that, they often escape punishment, since they cannot be said to have violated the letter of law, but, by violating the spirit of law, they commit crimes which are truly anti-social and creates enormous damage to the public health and safety at large9

Just like any other industry, fraudulent claims have their significant share even in the healthcare sector. Fraudsters are busy finding means and opportunities to make some undue profit. However, the huge, inviting, easy pile of cash sets healthcare apart from the rest of the industries when it comes to fraud. Some of the major factors that make medical frauds so alluring include:-

8http://www.legalserviceindia.com/legal/article-530-white-collar-crime-detail-study.html,last visited 0n 02,02,20. 9G. Nagarajan; Dr. J. Khaja sheriff , White Collar Crimes in India, International Journal of Social Science & Interdisciplinary Research Vol.1 Issue 9, September 2012, ISSN 2277 3630.

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 The ease in filing fraudulent healthcare claims

 Billing for higher medical codes and incorrect diagnoses which easily go unnoticed

 Lucrative kickbacks for member referrals

 Difficult-to-detect prescription of unnecessary or additional treatments

 The ease of forging and selling prescription drugs

 With insurance and other policies becoming increasingly popular, healthcare crooks can be anyone, including the patients, suppliers, vendors, providers as well as pharmacists. In addition, computer hackers and organized crime rings also add up to this list of fraudsters.  Kerala Ayurveda paramparya forum V. state of Kerala, decided in 2018 also provides certain guidelines in order to prevent health care frauds, it has banned unauthorized medical practice even for a parampara. Supreme Court has upheld a 2003 Kerala High Court judgment that held that persons who do not fulfill the prescribed qualifications and are not duly registered under the relevant statute cannot be permitted to practice as a paramparavaidya.

S.C laid down certain guidelines which are as follows:-

 That person having no recognized and approved qualifications, having little knowledge about the indigenous medicines, are becoming medical practitioners and playing with the lives of thousands and millions of people.  That a number of unqualified, untrained quacks are posing a great risk to the entire society and playing with the lives of people without having the requisite training and education in the science from approved institutions. That Travancore-Cochin Medical Practitioners Act, 1953 as well as the Indian Medicine Central Council Act, 1970 were also enacted on the similar lines.  That every practitioner shall be deemed to be a practitioner registered under the Act if at the commencement of this Act, his name stands entered in the appropriate register maintained under the said Act and every certificate of registration issued to every such practitioner shall be deemed to be a certificate of registration issued under this Act.  That in the instant case, appellants failed to show that they possessed requisite recognized qualification for registration entitling them to practice Indian system

12 www.whiteblacklegal.co.in ISSN: 2581-8503 of medicines or their names have been entered in the appropriate registers after the commencement of this Act10.

LEGISLATION THAT GOVERNS WHITE COLLAR CRIME IN INDIA Government has made various legislations which prevents white collar crime, these legislation contains punishment for White Collar Crimes in India, and those are:-

 Indian penal Code 1860  Companies Act 1960  Commodities Act 1955  Prevention of Corruption Act 1988  Negotiable Instruments Act 1881  Prevention of Money Laundering Act 2002  Import and Export Control Act But despite of these legislation White Collar Crime is increasing day by day, this is the high time that India should formulate a special Act which only governs White Collar Crime.

HOW CAN YOU PREVENT HEALTHCARE FRAUD? The best solution to this problem is to deploy vast on-field strength and technological capabilities to create a data repository of verified doctors. This can be achieved by

 Visiting each doctor on the ground to register their biometric details along with copies of their medical degrees.

 Authenticating these degrees and certificates at source, which means cross verified with the college/university along with the doctors’ residency details.

 Genuine doctors’ data is then uploaded to the repository creating a master list of medical professionals in a variety of fields and specializations.

 Data of fake doctors also be uploaded so patients can be fairly warned

 Government stores this repository on online and offline public domains, freely available to the public.

 The problem of the relationship between the doctor and the patient had been recognized long back by the penologists. Manu said that the ones indulging in false

10 www.indiankanoon.com, last visited on 03.02.20

13 www.whiteblacklegal.co.in ISSN: 2581-8503 practices, for example, where a doctor makes false diagnosis report, heavy fine would be levied on him. Removing of immature fetus was considered to be a heinous crime and such person was called to be subject to severe punishment.  There have happened many cases where the medical practitioner has had no license to practice medical profession. The doctor treating the patient had turned out to be a fake doctor who has only deceives the patients by not treating them properly and running away with their money.  Examples of white collar crime in medical profession could be- issuing fake medical certificates, facilitating illegal abortions, selling sample drugs and medicines directly to the patients or to the chemists in India. Sometimes, the professionals in the medical field are seen giving advice to criminals of how to escape the allegations using medical grounds11  In Karnataka two doctors, K.H. Jnanendrappa and K.M. Channakeshava, were charged with making fake medical certification for Abdul KarimTelgi, who was involved in a multicrore stamp paper racket in order to help him get bail on the ground of health issues. Therefore, under the Prevention of Corruption Act, 1988 they both were held liable with 7 years imprisonment and with a fine of 14 lakh rupees each.

CONCLUSION AND RECOMENDATION It is clear that due to advancement of science and technology newer form of criminality known as white collar crime has arisen. The term “white-collar crime” has not been defined in the code. But the dimensions of white-collar crime are so wide that after analyzing the provisions of Indian Penal Code 1860, we may conclude that certain offense under Indian Penal Code is closely linked with white collar crimes such as bribery, corruption and adulteration of food, forgery etc. The provisions of Indian Penal Code dealing with white- collar crimes should be amended to enhance punishment particularly fine in tune with changed socioeconomic conditions. The special Acts dealing with white collar crimes and the provisions of Indian Penal Code should be harmoniously interpreted to control the problem of white-collar crimes. India to maintain its growth story needs to reduce fraud and corruption in government and private sector. As previously mentioned corruption and fraud stop multinationals from investing in the country. The decrease in foreign direct investment in 2011 and the international financial institutions outflow of funds from stock markets are

11 Khan, white collar crime: study of emerging of India, 2013, M.D University.

14 www.whiteblacklegal.co.in ISSN: 2581-8503 clear indicators of the negative impact of fraud and corruption. Therefore, Indian government must improve governance and take strict action against the offenders. Comptroller Auditor General is showing the way forward, the need of the hour is for political parties to have the spirit to clean up the mess. The private sector must implement fraud prevention measures and focus on ethics to reduce frauds, both sectors have to collaborate to minimize fraud risks in India.

I would like to put forward certain recommendations with respect to White Collar Crime12

 There is no proper definition of white Collar Crime in India, these Socio- economic offences should not be taken leniently by the government.  A specialized agency should be established to deal with investigation and prosecution of white collar crimes, and there should be two wings investigation and prosecution wing where there will be effective punishments and investigation.  Special Courts must be set up to adjudicate cases of white collar crimes, this will also ensure speedy trial of such cases.  Legislative amendments should be made for Enhancing punishments for white collar crimes.  There should be a formulation of Specific set of legislation which will only deal with White Collar Crime, as presently IPC has certain provision to take care of these crimes in India.

12 https://shodhganga.inflibnet.ac.in/bitstream/10603/200019/17/17_chapter%208.pdf, last visited 15.07.20.

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