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Your premium dollars and even your benefit coverage are a magnet for health care fraud and abuse. Phony billing scams increase costs for everyone, and medical identity theft can result in loss of your benefits and add incorrect information to your medical records.
That's why it's important to learn more about health care fraud and abuse, and what all of us can do to fight it.
What Is Health Care Fraud and Abuse?
Health care fraud occurs when someone intentionally misrepresents a fact on a health care claim for the purpose of receiving - or increasing - reimbursement from a health plan. Fraud also occurs when someone misrepresents the delivery of health care services or supplies.
Health care abuse occurs if an activity abuses the health care system but does not meet the legal definition of fraud. Examples include over-use of services, or changing procedure codes and “unbundling” of services usually delivered together, to increase reimbursement.
How do people commit health care fraud?
Fraud is found to occur among all participants of the health care system. Here are some of the most common schemes Regence has uncovered that defraud members of health plan dollars.
- Members loan their health plan card to a friend, relative or even someone they owe money, so that person can receive medical care. This has unforeseen consequences: (1) the diagnoses and care of these unauthorized users enter the member's medical record, and may result in improper treatment; (2) benefits have a lifetime maximum, and unauthorized use goes against that cap.
- Doctors and other providers bill for services/supplies not actually delivered, either adding services to a legitimate bill, or fabricating a new claim for an existing patient.
- Clinics provide a covered service but add an exorbitant “administrative fee” that may become the member's responsibility, or bill for services not delivered.
- Employers add family members to the company's group health plan even though they aren't on the payroll.
- Employees claim ineligible family members, such as children who are no longer dependents, or ex-spouses.
- Individuals misrepresent their medical history on a health plan application to ensure acceptance, sometimes assisted by brokers or agents selling the policies.
- Claims processors may create phony bills for real patients and divert reimbursement funds to their own accounts.
- Thieves alone or in a group steal health plan cards to obtain medical care, often with the intent of getting prescription drugs to sell illegally. Scams include phony clinics offering “free” care to get people's legitimate health plan information.
Health care fraud steals billions
We are all the victims when it comes to health care fraud, paying the cost through higher premiums and taxes.
- The Centers of Medicare and Medicaid Services estimates $97 billion a year is lost to fraud through federal health programs, mainly Medicare and Medicaid.
- The National Health Care Anti-Fraud Association estimates as much as ten cents of every health care dollar is lost to fraud and abuse--that's more than $170 billion.
