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Health Insurance Fraud

What is Health Insurance Fraud?

Health insurance fraud is a crime. An offense occurs when false or misleading information is provided to a health insurance company in an attempt to have the company pay unauthorized benefits to the policy holder, another party, or the organization providing services. Health insurance fraud can be committed by the insured individual or the provider of the health service(s). Health insurance fraud is not an innocent mistake and is performed by a small population of people.

Examples of Health Insurance Fraud

There are a variety of ways in which health care fraud can occur, committed either by a doctor or a consumer. Some examples of provider health care fraudulent activity include, but are not limited to:

  • Billing for services never performed
  • Falsifying a patient's diagnosis to justify the need for tests, surgeries, or other procedures that are not medically necessary
  • Misrepresenting procedures performed to obtain payment for non-covered services, such as cosmetic surgery
  • Upcoding; billing for a more costly service than the one actually performed
  • Unbundling; billing each stage of a procedure as if it were a separate procedure, in order to maximize the reimbursement
  • Accepting kickbacks (in kind or cash) for patient referrals
  • Waiving patient copays or deductibles and over-billing the insurance carrier or benefit plan
  • Billing a patient more than the copay amount for services that were prepaid or paid in full by the patient's benefit plan

Examples of consumer health insurance fraud include the following, but are not limited to: 

  • Using a false or expired identification card in order to receive medical services or medications
  • Lending a medical identification card to an individual who is not entitled to its use
  • Adding an individual(s) for coverage to a contract who are not eligible
  • Forging or altering medical bills and/or receipts

How Health Insurance Fraud Impacts You

Fraudulent offenses impact patients, taxpayers, and the government. For consumers, health care fraud means higher premiums, out-of-pocket costs, and taxes. Health insurance fraud accounts for approximately 10% of overall health care spending, leading to a multi-billion dollar loss. Other implications include:

  • Being subjected to unnecessary or unsafe medical procedures or treatments
  • Unexpected exhaustion of your medical insurance benefits
  • Having inaccurate information added to your medical records
  • Receiving the incorrect medical treatment 
  • Being considered uninsurable as a result of medical identify theft
  • Unexpectedly failing a physical examination for employment