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What is Health Care Fraud?

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  • Written By: Vanessa Harvey
  • Edited By: A. Joseph
  • Last Modified Date: 17 November 2016
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Health care fraud refers to the crime of the intentional falsification of information that is to be submitted to an entity for the express purpose of receiving payment for health care services or equipment. It is considered a "white-collar" crime. The targeted entity is almost always a health insurance company, but it also can be a branch of government that provides health care. There are a variety of ways in which medical services fraud can be committed. Most of them involve falsifying information on an insurance claim.

Patients as well as doctors and suppliers of medical equipment have been found to knowingly participate in health care fraud, which contributes to the rising costs of health care services, equipment and prescription medications. Those persons' criminal actions might be profitable for the patient, for the doctor or other health care provider or for the medical supplier. One form of health care fraud is committed when a patient's diagnosis is falsified to justify the performance of tests, treatments, procedures and even surgery that is not medically necessary. For example, medical insurance companies generally do not offer coverage for cosmetic surgery, but a cosmetic surgeon might falsify the claim submitted to an insurance company in order to receive payment.

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Other ways in which some dishonest people commit health care fraud involve submitting insurance claims for more expensive services, treatments or procedures than those that were actually rendered. This is sometimes accomplished by a technique known as upcoding. Codes for services, treatments and procedures that are closely related to a specific illness or condition but that are different in price can be intentionally "confused" when reported on claims. Health care fraud also is committed when billing for a single treatment, procedure or service is done in unnecessary stages, leading to multiple payments for what should have been paid in only one payment.

Modifying patient co-payments and deductibles established by the covering insurance company is another form of health care fraud. Sometimes these payments are waived and the claim changed to collect more money than what should be collected to cover the patient's out-of-pocket expenses. Health care fraud has even extended to the black market. When a person gets a fully covered prescription filled for the purpose of selling the drug for profit, he or she commits health care fraud. Beneficiaries of health care benefits can help to reduce fraudulent activity by reporting their suspicion of fraud, which usually can be done anonymously.

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anon994244
Post 4

This person had health insurance through the company she and her boyfriend worked for (same place) but both were able to get the total hours time off and collect from the state of MN because they weren't married, yet lived in the same house for years because they had two babies in the last three years. He's an immigrant who just got his citizenship last year. How is this possible?

SarahGen
Post 3

@fBoyle-- Yes, that's health care fraud. Performing medical procedures and services that are not required is fraud as well as misdiagnosing a patient so that expensive medical procedures can be claimed. You should report that doctor.

I had to research health care fraud statistics recently for a paper. Actually, the health care fraud committed by health care providers is a very small number. The majority of health care fraud is carried out by criminals. These can be criminals who steal others' identity and then filing insurance claims for medical procedures with their identity information.

literally45
Post 2

@fBoyle-- I'm not sure, have you asked a lawyer? I don't think that would be considered fraud. A brain MRI may be done when someone has chronic headaches to see if there is an issue in the brain.

It would be fraud if your doctor had not given you an MRI but had claimed to have given you one to the insurance company to collect money. But you probably would not even know that unless you inquired with the insurance company directly.

I agree that some doctors run too many tests, but it's probably not fraud if there is sound reasoning behind it.

fBoyle
Post 1

Is it health care fraud if a doctor uses medical tests that are unnecessary?

During my last check up, I mentioned to my doctor that I have headaches sometimes and he had me get an MRI! Obviously nothing was found. Is this fraud?

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