Preventing Insurance Fraud

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Learn what constitutes fraud and how to protect yourself.

The National Health Care Anti-Fraud Association (NHCAA) estimates that about 3 percent of all healthcare spending is lost to insurance fraud. Other governmental agencies place this estimate as high as 10 percent. In 2007, $2.26 trillion was spent on healthcare, which means that $226 billion would have been lost to fraud if the 10 percent estimate were accurate. What does this mean for you? Health insurance fraud translates to higher premiums and out-of-pocket expenses, as well as reduced benefits and coverage for consumers. Fraud also increases the cost of providing health insurance for employers and raises the overall cost of healthcare.

Types of Fraud

There are several types of fraud that dishonest insurance providers can commit. Providers may bill consumers for services that were never rendered, or bill for more expensive services or procedures than the ones that were actually provided — a form of fraud called "upcoding." They may perform medically unnecessary services or misrepresent non-covered treatments as medically necessary in order to generate insurance payments. Other forms of fraud include falsifying a patient's diagnosis in order to justify medically unnecessary tests, surgeries, or other procedures; billing each step of a procedure as if it were a separate procedure; billing a patient more than the co-pay amount for services that were prepaid or paid in full by the benefit plan; accepting kickbacks for patient referrals; or waiving patient co-pays and deductibles and then over-billing the insurance carrier or benefit plan.

Types of Fraud

There are some simple steps you can take to protect yourself from insurance fraud:

• Be aware of any treatments or procedures you receive. Ask your doctor to explain the need or reason for each procedure and keep your own records of any procedure you receive.
• Carefully review all your billing statements for any errors. Your statement should show what your insurance company was billed for, what they paid, and how much you owe. If you were billed for any service or procedure that your did not receive, immediately call your insurance company. If it is simply a mistake, they should be able to fix it easily.
• Guard your insurance card as carefully as you would a credit card. Do not give your insurance number, insurance card, or medical records to anyone except appropriate medical professionals. Never give out your insurance number to door-to-door salespeople, telemarketers, or over the internet.
• Beware of offers for "free" medical services. If it sounds too good to be true, it probably is. Offers of free services are often made to obtain patient names and insurance information for the purpose of illegally billing you or your insurance company for treatments that you never received. You should always question what is being offered and who is paying the cost, and decline the offer if you are unsatisfied with the answers.

Health insurance fraud is a serious and costly crime for all involved. The best way to avoid becoming a victim of fraud is to be an informed patient and consumer. Although you may not be able to stop dishonest insurance providers from attempting to commit fraud, you can protect yourself against them by taking simple precautions. If you do suspect that fraud has been committed, you can report it to the Office of the Inspector General, either by calling their hotline at 1-800-HHS-TIPS or by going to www.oig.hhs.gov/fraud/report-fraud.

SOURCES:

Coalition Against Insurance Fraud. www.insurancefraud.org. (Accessed 10/20/11.)

National Health Care Anti-Fraud Association. www.nhcaa.org. (Accessed 10/20/11.)

Office of the Inspector General. http://www.oig.hhs.gov. (Accessed 10/20/11.)

Reviewed by Susan Weiner, RD, MS, CDE, CDN. 05/12.