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Healthcare fraud involves misrepresenting health insurance claims for financial gain, costing an estimated $100 billion annually. Consumers can report fraudulent claims by examining Explanation of Benefits forms and contacting insurance fraud departments or the US Office of the Inspector General. False claims and overbilling are common, with chiropractic practices being the most frequent offenders. Personal injury factories, unlicensed insurance companies, and life insurance scams are also prevalent. Consumers can vet companies through the BBB, FBI, Health Insurance Commissioner, or OIG.
Healthcare fraud involves the deliberate misrepresentation of health insurance claims to obtain an undeserved financial benefit. Examples include billing for services that have not been rendered, billing for services of a higher standard than those provided, and billing for unnecessary tests or services. Although many major health insurance companies use highly complex computer programs to identify dubious insurance billing patterns, health care consumers recognize and report the vast majority of fraudulent health insurance claims. By carefully examining the Explanation of Benefits (EOB) forms 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 known pattern of healthcare fraud emerges, a consumer can report the source to the insurance company’s fraud department or, in the United States, to the U.S. Office of the Inspector General (OIG) by phone or email .
According to the US Government Accountability Office (GAO), approximately 14% of the money paid to providers for Medicare claims is wasted on health care fraud. Most authorities estimate that approximately $100 billion US dollars (USD) annually is lost due to this problem. False claim plots to misrepresent the extent and nature of treatments or the diagnosis for which treatments are claimed are the most common form of healthcare 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 factories have yielded evidence of healthcare fraud in the form of billing for non-existent or negligible injuries, fabrication of diagnoses, provision of costly and unnecessary services and supplies, and payments to “victims” to knowingly participate. Recruiters, called runners or cappers, actively seek traffic accidents and workers’ compensation cases to support the mill. Health insurance companies identify healthcare fraud in these settings by red flagging unusual patterns of sustained and overbilling 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 applicant’s health. The claimant 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.
Unlicensed or bogus health insurance companies also result in millions of dollars each year in unpaid claims. Anti-fraud experts are advising consumers to stay away from companies that sell policies with generous benefits at well-below-average costs. Other red flags include health insurance companies that require you to join a membership or association, companies that are not licensed in a particular state, and companies that the customer has never heard of. Consumers can vet companies by calling their local Better Business Bureau (BBB), the Federal Bureau of Investigation, the state Health Insurance Commissioner, or the OIG.
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