Health insurance fraud is one of many factors to have caused significant increases in group health insurance costs in the United States. The type of fraud involved in health insurance involves billing for services that were never rendered, charging for services that are not necessary, or charging unfairly.
GROUP HEALTH INSURANCE FRAUD IS ON THE TAXPAYER
"Fraud is costing taxpayers billions of dollars. More than ten years ago, a report issued by the Department of Justice called the Department of Justice Health Care Fraud Report, Fiscal Year 1998 found that fraud caused losses to Medicare of $12 billion in 1998. By all accounts, this fraud problem has worsened since then. Across the health care industry, the costs of fraud are difficult to calculate", said Morgan Moran of Moran Insurance & Financial Solutions.
The most common fraudulent activity arises from the healthcare providers that bill insurance companies. These cases involve providers who bill for services that were not rendered, over bill for services that were rendered, or provide unnecessary treatment to increase revenue.
When false claims are committed, they can include billing for things that were never done. This is a very blatant type of fraud that is a simple misrepresentation of the services that were provided and involves falsehoods about a patient’s health condition and diagnosis.
Less obvious fraudulent practices involve providers that conduct medical procedures, request unnecessary tests, or provide medicines that are not necessary. This practice is common in facilities known as “personal injury mills” whereby injury attorneys and unscrupulous health clinics conspire to bill insurance companies for non-existent or minor injuries. In such cases, injured people are provided with a series of unnecessary treatments and told they need to return for multiple visits so that an extensive paper file can be developed for use in mounting an injury claim against a negligent party. In some cases, the “injured” person plays a role by knowingly taking part in the ploy.
"Excessive testing provides another opportunity for fraud within the health insurance industry. Ultimately, testing will provide information that should determine the future management of a patient’s injury. If testing is performed which does not directly provide information relevant to the patient’s treatment, it contributes to unnecessary costs to the insurance company and if there is a pattern of this practice, providers may be suspected of fraudulent behavior designed to simply increase revenue", noted Moran.
A common fraudulent practice among healthcare providers involves intentional mis-coding of procedures. Health insurance companies are set up to pay based on a set of procedure codes. Billing software is designed to determine what procedures are covered and which ones are not based on a specific code, or a series of codes relating to the patients condition, injury, and the treatment already given. As providers learn how the codes are interpreted, they have an opportunity to select codes that provide for coverage even though they may be misrepresenting what treatment was actually given.
REDUCING HEALTH INSURANCE FRAUD WILL DECREASE HEALTHCARE COST
Consumers can contribute to the detection of group health insurance fraud, and fighting fraud is one effective ways of dealing with the high costs of health insurance today. Reviews of billings can reveal whether health care providers are billing appropriately for the services that were actually rendered. Patients that suspect that a provider is taking advantage of their insurance company should immediately report the fraud to their health care provider.