Kusserow on Compliance: FBI Reports on business email compromise scams

BEC Scams Accounted for 50% of cyber losses last year

The FBI once again reported on the increase in cyber-criminal activity related to ransomware and business email compromise (BEC) scams. During 2019, BEC accounted for almost a half million internet and cyber-crime complaints and caused losses of more than $3.5 billion. Approximately half of the reported loses were as result of BEC, sometime referred to as EAC (Email Account Compromise) crimes, which averaged $75,000 per incident reported. This was the most damaging and effective type of cyber-crime last year. The 23,775 BEC victims accounted for $1.77 billion in losses for victims, which was on average $75,000 per complaint.

These are sophisticated scams targeting business activities and individuals performing wire transfer payments. They normally come about as result of either a compromise or spoof an email account for a legitimate person/company. They use this email account to send fake invoices for business contractors. Sometimes they are sent to employees. They are designed to trick people into wiring money into the wrong bank accounts. An example of this relates to the diversion of payroll funds, wherein HR or payroll receives an email appearing to be from an employee requesting to update and change their direct deposit information for the current pay period, generally routing it to a pre-paid card account.

The most recent innovation has been scammers mimicking employee’s own CEO to steal funds from the payroll department. They hack into a company’s email server and identify which executives’ email addresses they can spoof to trick unsuspecting employees. The FBI also noted a decrease in the number of ransomware complaints, however a rise in the amount of losses per incident. Additionally, 764 health care providers reported being ransomware victims in 2019.


Richard P. Kusserow served as DHHS Inspector General for 11 years. He currently is CEO of Strategic Management Services, LLC (SM), a firm that has assisted more than 3,000 organizations and entities with compliance related matters. The SM sister company, CRC, provides a wide range of compliance tools including sanction-screening.

Connect with Richard Kusserow on LinkedIn.

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Copyright © 2020 Strategic Management Services, LLC. Published with permission.

STRATEGIC PERSPECTIVES: A doctor’s guide to reasonable accommodation requests

Health care professionals making disability assessments for employees seeking workplace accommodations should be apprised of the relevant laws.

Doctors and other health care professionals are often called on to render critical opinions concerning patients’ disabilities for purposes of workplace reasonable accommodation requests. However, they sometimes are not well-versed in the law surrounding reasonable accommodations under Title I of the Americans with Disabilities Act of 1990 (ADA). Doctors’ opinions can have a profound effect on the employee’s ability to perform his or her job and the employer’s business operations.

This Strategic Perspective, written by Jeffrey J. Lorek, special counsel at Orrick, Herrington & Sutcliffe LLP, details reasonable accommodations and the responsibilities under the ADA for doctors and health care professionals.

Kusserow on Compliance: Most organizations reported encounters with government authorities

• Most organizations have made disclosures for HIPAA breaches and overpayments
• One third received demand letters
• Other encounters report were with OIG and DOJ

It is widely recognized that regulatory and legal enforcement activities have been increasing over the last few years. The results should be a warning bell to all compliance officers that regulators and enforcement officials are right around the corner, necessitating increased efforts on ongoing monitoring and auditing to mitigate exposure of compliance-related risk areas. In the soon to be released national healthcare “2019 Compliance Benchmark Survey” most respondents reported having encountered issues with government agencies in last five years. Ranking at the top, with nearly two-thirds of the respondents, was disclosure to the HHS Office for Civil Rights (OCR) for breaches of privacy under the Health Insurance Portability and Accountability Act (HIPAA). Over half reported making self-disclosures of overpayments received and addressing audits or investigations by government agencies. One-third reported responding to a demand letter from a government agency or contractor. Serious legal encounters with the government was reported at a much lower level.  One out of five respondents reported self-disclosure to the DOJ, OIG and CMS.  About one out of eight respondents reported their organization being involved in the settlement process with DOJ, self-disclosing to the OIG engagement of sanctioned individuals/entities, and being involved in a settlement process for a corporate integrity agreement (CIA).

The “2019 Compliance Benchmark Survey” report will be available without charge at the upcoming HCCA conference in Boston at Strategic Management Services, Booth 420. 


Richard P. Kusserow served as DHHS Inspector General for 11 years. He currently is CEO of Strategic Management Services, LLC (SM), a firm that has assisted more than 3,000 organizations and entities with compliance related matters. The SM sister company, CRC, provides a wide range of compliance tools including sanction-screening.

Connect with Richard Kusserow on Google+ or LinkedIn.

Subscribe to the Kusserow on Compliance Newsletter

Copyright © 2019 Strategic Management Services, LLC. Published with permission.

U.S. pays nearly twice as much for drugs compared to other countries

A recent HHS analysis revealed that prices charged by drug manufacturers to wholesalers and distributors in the United States are 1.8 times higher than in other countries for the top drugs by total expenditures separately paid under Medicare Part B. U.S. prices were higher for most of the drugs included in the analysis, and U.S. prices were more likely to be the highest prices paid among the countries in the study (ASPE Report, October 25, 2018).

Medicare Part B

Drugs typically administered to patients by healthcare practitioners are covered and paid under Medicare Part B, which is part of the fee for service traditional Medicare benefit. Under Part B, providers buy and bill for these drugs. Medicare pays suppliers and providers based upon the Average Sales Price (ASP) for each product, as reported by manufacturers to CMS. Physician offices that buy and bill Part B drugs are paid 106 percent of the drug’s ASP, and hospitals are reimbursed either at 106 percent or 77.5 percent of ASP, depending on the hospital outpatient department’s participation in a safety net drug pricing program. Spending on Part B drugs has doubled since 2006.

The analysis and results

Data was compiled on the top drugs based on total Medicare reimbursement to either physician offices, hospital outpatient departments, or overall under Medicare Part B in 2016. Countries included in the analysis included: the United States, Austria, Belgium, Canada, Czech Republic, Finland, France, Germany, Greece, Ireland, Italy, Japan, Portugal, Slovakia, Spain, Sweden, and the United Kingdom. The analysis identified thirty two Medicare Part B drugs among the top twenty drugs in spending for each setting. These thirty two drugs accounted for $18 billion in spending, out of a total $27 billion on Part B drugs across these settings. The main analysis reports on twenty seven Part B Drugs.

Across the twenty seven drugs in the study, the U.S. ex-manufacturer prices were 1.8 times than average international ex-manufacturer price. There was not any one country that consistently had the highest or lowest prices compared to the U.S. for twenty of the drug products; U.S. prices exceeded the average international price by more than twenty percent. In addition, for nineteen of the twenty seven products the U.S. prices were higher than any other country. Excluding the U.S., Germany and Canada had the highest prices for six drugs and Japan for five drugs. France and the United Kingdom had the lowest prices for four drug products. Japan, Sweden and Slovakia had the lowest prices for three drug products each. Finally, the analysis calculated that the Medicare program and its beneficiaries spent an additional $8.1 billion (47 percent more) on these twenty seven products that it would have, if payments based upon ASP were scaled by the international price ratios.

Overall, prices and reimbursement rates for Part B drugs are significantly higher for the U.S. providers than purchasers outside the U.S., except for a few outlier cases. The amount by which U.S. prices exceeded those of international comparators varied significantly by product, and there was no clear pattern as to which countries were consistently paying lower prices. The analysis suggests that Medicare Part B could achieve significant savings if prices in the U.S. were similar to those of other large market based economies.