Health fraud entails the deliberate misrepresentation of health insurance claims to obtain an unmerited economic benefit. Examples include billing for services that were not rendered, billing for higher level services than those provided, and billing for unnecessary tests or services. Although several of the leading health insurance companies use highly complex computer programs to identify dubious patterns of insurance billing, health consumers recognize and report a vast majority of fraudulent health insurance claims. By carefully examining their explanation of benefits (EOB) forms that they receive from their insurance companies, consumers can determine whether the forms accurately record the actual services provided to them. If a questionable claim or a known pattern of health fraud becomes apparent, a consumer may report the source to the insurance company fraud department or, in the United States, to the United States Office of the Inspector General (OIG) by telephone or email.
According to the United States Government Accountability Office (GAO), approximately 14 percent of the money paid to providers for Medicare claims is wasted on health fraud. Most authorities estimate that about $100 billion U.S. Dollars (USD) per year are lost to this problem. False claim plots to misrepresent the scope and nature of treatments or the diagnosis for which the treatments were indicated constitute the most common form of health fraud. Other illegal practices include double billing, kickbacks, miscoding, unbundling of services, and failure to collect coinsurance payments. The OIG has specifically found that the most common offenders for inappropriate and deceptive billing are chiropractic practices and practices in which chiropractic plays a role.
Investigations of personal injury mills have yielded evidence of health fraud in the form of billing for nonexistent or negligible injuries, fabrication of diagnoses, delivery of expensive and unnecessary services and supplies, and payments to the “victims” to knowingly participate. Recruiters, called runners or cappers, actively seek out auto injury and workman’s compensation cases to sustain the mill. Health insurance companies identify health fraud in these settings by red flagging unusual patterns of sustained and excessive billing by a small number of providers for a large number of patients. Other scams include companies that recruit terminally ill patients to apply for multiple life insurance policies and lie about the health of the applicant. The applicant receives a small percentage of the face value of each policy from the unscrupulous company, but the company receives the face value of many policies when the policyholder dies.
Unauthorized or false health insurance companies also result in millions of dollars each year in unpaid claims. Anti-fraud experts advise consumers to steer clear of companies that sell policies with generous benefits at costs that are well below average. Other red flags include health insurance companies that require the user to join a membership or association, unlicensed companies in a given state, and companies of which the customer has never heard. Consumers can check out companies by calling their local Better Business Bureau (BBB), Federal Bureau of Investigation, state Health Insurance Commissioner, or the OIG.