Healthcare Fraud

Healthcare Fraud

What is Health Care Fraud?

The U.S. Department of Justice estimates healthcare fraud accounts for $80 billion to $100 billion in losses each year. This includes direct losses from billing errors and improper payments made by insurance companies, and some other fraudulent schemes.

Fraud in our nation's health care system, including that in the Philadelphia region of Pennsylvania, results in losses of millions of dollars every year from Medicare, Medicaid, and private insurance programs. And beneficiaries and other health care recipients pay for these significant losses through higher premiums, increased taxes, and reduced services.

Health care fraud occurs when an individual, a group of people, or a company knowingly misrepresents or misstates something about the type, the scope, or the nature of the medical treatment or service provided in a manner that could result in unauthorized payments being made.

What Can You Do About Health Care Fraud?

The government has stepped up efforts to combat health care fraud by increasing penalties for those who commit it, improving access to electronic medical records, and developing new tools to track providers and identify potential fraud cases.

For approximately half a decade, fiscal intermediaries and carriers for Medicare have been required, in virtually all circumstances, to send notices and explanations of benefits to Medicare users and patients. It is critically important that all beneficiaries review and verify the information on these documents – and that they question any entries or notations that are inconsistent with or unrelated to the essential health care services provided. In particular, you must be incredibly attentive to and challenging of notices and explanations that memorialize:

  • Payments for any medical services, treatment, supplies, or equipment that you did not receive.
  • Dates of service or provision of items that differ from the dates on which you received the service or items.
  • Payments for ambulance transportation that was not provided to you.
  • Duplicate charges for the same service or items or home medical equipment while you were hospitalized.
  • In addition, you should be especially cautious if a health care provider tells you that a test or specific equipment is “free,” but your insurance number is required for “record purposes.”

The Challenge of Healthcare Fraud

In the United States, health care fraud costs taxpayers billions of dollars annually. This includes direct losses from providers and insurers' improper payments and indirect losses from decreased trust in the system. It’s estimated that between $80 billion and $100 billion is lost each year due to fraud.

In 2018, $3.6 trillion was spent on healthcare in the United States, representing billions of health insurance claims. It is an undisputed reality that some of these claims are fraudulent. Although they constitute only a tiny fraction, those fraudulent claims carry a very high price tag, both financially and in how they impact our perception of the integrity and value of our health care system.

The National Health Care Anti-Fraud Association (NHCAA) estimates that the financial losses due to health care fraud are in the tens of billions of dollars each year. A conservative estimate is 3% of total health care expenditures, while some government and law enforcement agencies place the loss as high as 10% of our annual health outlay, which could mean more than $300 billion.

For employers, private and government alike, health care fraud increases the cost of providing insurance benefits to employees, increasing the overall cost of doing business. Whether you have employer-sponsored health insurance or you purchase your insurance policy through HealthCare.gov, a state marketplace, or the individual market, health care fraud inevitably translates into higher premiums and out-of-pocket expenses for consumers, as well as reduced benefits or coverage. For many Americans, the increased cost resulting from fraud could mean the difference between making health insurance a reality or not.

However, financial losses caused by health care fraud are only part of the story. Health care fraud has a human face too. Individual victims of healthcare fraud are sadly easy to find. These individuals have been exploited and subjected to unnecessary or unsafe medical procedures. Or whose medical records are compromised or whose legitimate insurance information is used to submit falsified claims.

Don't be fooled into thinking that health care fraud is a victimless crime. There is no doubt that health care fraud can have devastating effects.

Health Insurance and Medical Billing

The Affordable Care Act (ACA) required all individuals to have health insurance coverage by 2016. If you don’t have health insurance, you may qualify for Medicaid or the Children’s Health Insurance Program (CHIP). In addition, if you earn too much money to be eligible for Medicaid but not enough to afford private insurance, you may qualify under the ACA for subsidies to purchase insurance through the federal marketplace.

Health insurance and medical billing fraud occur when a health care provider or individual deceives an insurer to receive greater reimbursement.

Health Care Fraud and Organized Criminal Groups

The FBI estimates that health care fraud costs the U.S. economy $80 billion per year. This includes direct losses from fraudulent billing and indirect losses due to lost productivity caused by people who cannot work because they are sick.

Dishonest health care providers are not the only ones committing health care fraud. So enticing an invitation is our nation's pool of health care money, that in some geographic areas, law enforcement agencies and health insurers have witnessed the migration of criminals from illegal drug trafficking into the safer and far more lucrative business of perpetrating fraud schemes against Medicare, Medicaid, and private health insurance companies.

As it's often called, Enterprise crime can be far-reaching and move quickly from place to place. In 2007, Medicare Fraud Strike Force Teams began to be established in various locations across the nation considered to be hotbeds of fraud activity to harness the collective resources of Federal, State, and local law enforcement entities to prevent and combat health care fraud, waste, and abuse. Strike Force “takedowns” often involve dozens of defendants engaged in elaborate enterprise-wide fraud schemes. Strike Force Teams currently operate in Miami, Los Angeles; Detroit; Houston; Brooklyn; Baton Rouge; New Orleans, Tampa, and Orlando; Chicago; Dallas; Washington, D.C.; Newark and Philadelphia; and the Appalachian Region.

In 2018 alone, investigative efforts of the FBI resulted in over 812 operational disruptions of criminal fraud organizations and the dismantling of the criminal hierarchy of more than 207 health care fraud criminal enterprises.

Solutions to Fraud and Abuse

The most common solution to fraud and abuse is simply stopping doing business with providers who engage in it. This may be difficult if they provide services to many people or are part of a large organization. It’s important to know what steps your insurance company takes to detect and prevent fraud. Some companies will require additional documentation from providers before paying claims. Others may require providers to submit claims electronically. If you suspect fraud or abuse, contact your insurer immediately.

Under the above definitions, it is impossible to delineate between fraud and abuse based on evaluating a single case or record. The government must prove that the acts were performed knowingly, willfully, and intentionally to prove fraud. To prove fraud occurred rather than abuse, the upcoding or miscoding of an event must occur over time and across many patients. For example, in the case of the Florida dermatologist noted above, fraud occurred over six years, 3,086 false procedures, and 865 patients.

Training and education implementation of computer-assisted coding (CAC) increased federal enforcement of fraud and abuse monitoring use of data modeling and data mining.

Reporting Health Care Fraud and Abuse

Health care fraud and abuse refer to deceptive practices in the health industry that lead to excessive profit. These schemes cost the nation billions of dollars each year and result in higher health insurance premiums and out-of-pocket expenses for consumers.

If you suspect someone has engaged in health care fraud and you’re in Pennsylvania, contact The Whistleblower Advocates today. You can call them for a free consultation, and they can answer any questions you may have while keeping everything confidential.

Do You Have A Healthcare Fraud Report To Make?

Our whistleblower lawyers can represent Health Care Fraud Whistleblowers, and we offer free consultations for Health Care Fraud cases and all other types of whistleblower lawsuits. For more information, you can contact The Whistleblower Advocates at (833) 310-3147 for a FREE, confidential consultation.

Frequently Asked Questions

  • What is health care fraud?

Health care fraud occurs when someone uses deception to obtain money from the health care system. The most common types of fraud are:

  • Medicare/Medicaid fraud
  • Prescription drug fraud
  • Medical device fraud
  • Billing fraud
  1. How does it happen?

Health care fraud can occur at any stage of the process. For instance, a provider may submit claims for services they did not provide, a bill for services they did not perform, or claim reimbursement for services they never provided. A patient may request an unnecessary service or file a false claim for payment. Or, a company may submit fraudulent invoices to its insurer.

  1. Who commits health care fraud?

Any individual or business entity that knowingly engages in health care fraud is committing a federal offense. However, many people commit health care fraud without knowing that they’re doing anything wrong. They may believe that what they are doing is legal.

Who Typically Commits Healthcare Fraud?

The Whistleblower Advocates - Philadelphia Office

123 S Broad St #1670-B
Philadelphia, PA 19109

Phone: (833) 310-3147

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We serve clients throughout the Delaware Valley including, but not limited to, those in the following localities: Pennsylvania including Berks County, Bucks County, Chester County, Delaware County, Montgomery County, and Philadelphia.

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