Health Insurance Fraud: A Big Reason to Worry

Insurance fraud refers to the intentional deception or misrepresentation of information to receive unauthorised benefits or money by individual or groups. According to the health insurance fraud statistics revealed by the National Health Care Anti-Fraud Association, 2008 the U.S spends more than $2 trillion on healthcare annually. At least 3 percent of that spending — or $68 billion — is lost to fraud each year.

But why should you worry about these exorbitant state expenditures? The lives of hard working and honest families; careers and businesses are damaged and even ruined by the health insurance fraud cases. Still not convinced? Look at the presentation below, and you would know how an insurance fraud affects you as a consumer and, more so, as a member if the community at large.

So what exactly is a health insurance fraud? Fraud can be committed by both a member and a provider.

Member fraud consists of;

• Ineligible members and/or dependents
  
• Using an Expired Identification Card
  
• Concealing pre-existing conditions
  
• Drug Prescription fraud
  
• Misrepresentation of what was provided; when it was provided; the condition or diagnosis; the charges involved; and/or the identity of the provider recipient.

Provider fraud consists of;

• Claims submitted by bogus physicians
  
• Billing for services not rendered,
  
• Double Billing
  
• Billing for excessive or inappropriate testing
  
• Diagnosis or treatments that are outside the scope of practice,
  
• Alterations on claims submissions
  
• Providing services while under suspension or when license have been revoked.
  
• Bogus Health Insurance Companies in operation

In one fraud case, Massachusetts orthopaedic surgeon Harold Goodman routinely gave patients potentially harmful X-rays and steroid injections they did not need so he could falsely bill Medicaid. Goodman spent as few as five minutes with each patient, giving one patient 74 X-rays and 112 steroid injections in less than three years. Goodman received six months in prison.

In a more recent health insurance fraud case, the Columbia Health care Company-HCA was faking cases to charge Medicare, Blue Cross and other taxpayer-supported programs millions more for treating a worse condition than the patients actually had. The company agreed to pay at least $754 million after overbilling, the largest such hospital settlement ever.

The above discussion makes it clear that health insurance fraud detection is a necessity and there is need for evolving an effective framework for dealing with the same. The following are some of the initiatives that have been made for effective and timely health insurance fraud detection;

• Several insurance companies have joined hands through the National Health Care Anti-Fraud Association for health insurance fraud detection, investigation and prevention.
• The Federal Bureau of Investigation (FBI) and the Office of the Inspector General (OIG) each have assigned hundreds of special agents to Health Fraud Projects.
• Property and health insurance companies have their own health insurance fraud investigators who handle claims in which the company may suspect fraudulent or criminal activity, such as arson, falsified workers' disability claims, staged accidents, or unnecessary medical treatments. Investigators may visit claimants and witnesses for verifications and often conduct surveillance work.
• Several industry initiatives have also been made in the direction of providing accurate, flexible and customized health insurance fraud detection solutions.

There are also organizations like Coalition against Insurance Fraud that have brought together consumers, government agencies and insurers for the common purpose of prevention and remedy of insurance fraud.