An Auckland GP Dr Hong Sheng Kong was sentenced this afternoon in the Auckland District Court to 12 months home detention and 400 hours community service after pleading guilty to *16 counts of fraud. Ten charges related to altering patient notes and six charges related to submitting fraudulent claims to the value of $183,134.59 The maximum penalty for each offence is seven years imprisonment.
The amount of $183,134.59 was repaid yesterday.

The charges relate back to 2007 when the Ministry of Health charged Dr Kong with a a number of fraud related matters and one charge of attempting to defeat the course of Justice. The offending took place between 2004 and 2007.

The matter was brought to trial in July this year when Dr Kong faced a total of 21 fraud related matters and one charge of attempting to defeat the course of Justice. Dr Kong initially pleaded not guilty to all of the charges but after four and a half weeks of trial he changed his plea to guilty in respect of 16 of the charges. The Ministry withdrew four charges and Dr Kong was discharged without conviction on those matters.

Six of the fraud charges to which he pleaded guilty involved Dr Kong or his staff entering a total of 3014 fictitious details into his practice management system in order to fraudulently claim government subsidies of $183,134.59.

The fictious details varied from changing the funding status of some patients to making false entries that indicated patients had visited the practice when they had not. In many instances Dr Kong also entered false clinical notes for patients in order to support the other false entries. Many of the patients were not in New Zealand at the time the entries were made and others had not seen Dr Kong for more than three years. All of the changes were made with the intention of fraudulently increasing, or continuing, the funding that the practice received from the government.

Ten of the charges relate to specific false clinical notes that were entered by Dr Kong. In some cases the patients had never ever been seen by Dr Kong, in others the patients were resident overseas. Dr Kong fabricated detailed notes of the conditions he had apparently treated these patients for including details of prescriptions he claimed to have supplied them. In several cases Dr Kong also changed the ethnicity of patients in order to maximise the funding he received.

National Risk Manager for the National Health Board, Michael Moore said that Dr Kong's offending was prolonged, systematic and calculated.

"He abused an honesty-based claiming practice, which resulted in him receiving government funding he was not entitled to. Fortunately the monitoring and auditing systems detected his offending. Fraudulent claims will not be tolerated. Where we suspect the misuse of funds we will investigate and prosecute to ensure the offenders are brought to justice," Michael Moore said.

If you work for a health practitioner and suspect the misuse of health funding you can call the Fraud Hotline 0800 424 888. Any member of the public who suspects fraudulent use of health funds earmarked for health and disability services is encouraged to call the hotline.


ENDS

Background

Dr Hong Sheng Kong operated the Hong Kong Surgery in Queens Road Panmure, Auckland from September 2002. Prior to forming his own surgery he practiced from the Panmure Surgery in Te Koa Road.

In addition to the Ministry of Health's actions, Auckland DHB has taken steps to recover additional funds that are considered owing.

How GPs claim for health funding

Prior to 2002, health subsidies paid by the New Zealand government to GPs were based on a "fee for service" claim. This involved the GP claiming for payment in respect of each patient consultation.

In 2002, the system changed to "capitated (per head) based funding". This meant that the trigger for payment was no longer patient consultations. Rather, GPs submitted registers of patients who were enrolled with their practice. They would be reimbursed under a pre-determined scale for each patient on the register, regardless of whether or not a patient had attended for a consultation. Registers were submitted every three months, and practitioners were reimbursed by way of bulk payment for the patients who were on the register.

Primary Health Organisations (PHO)

Under the new system, government funding is distributed via PHOs. PHOs are not-for-profit bodies and one of their responsibilities is for administering funding to medical practices.

In essence, the system was set up so that the relevant DHB contracts with PHOs in their region, which in turn contracts with medical practices. Each medical practice needs to join a PHO in order to access the new funding regime.

In this case, the relevant contractural arrangements were between Auckland District Health Board and AuckPAC Trust Board PHO and Hong Kong Surgery.

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