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Burden of Healthcare Fraud and Abuse Impacts Everyone

Program integrity strategies focus on pricing and reimbursing the correct amount to legitimate providers and suppliers for covered services — reasonable and necessary services provided to eligible beneficiaries — while concurrently taking actions to eliminate fraud, abuse and waste.

In this Audit Spotlight, we focus on healthcare fraud and abuse, significant concerns that drain vital resources, undermine trust, inflate costs, and impact patients and providers alike.

	Healthcare Fraud	Healthcare Abuse
Definition	Intentional deception or misrepresentation resulting in an unauthorized benefit of payment; deliberate act to secure an unfair or unlawful gain	Involves practices inconsistent with accepted sound fiscal, business or medical practices; results in an unnecessary cost or improper reimbursement for services not medically necessary or that fail to meet professionally recognized standards for healthcare
Key Characteristics	Knowing and willful intent to deceive or misrepresent; goal to obtain unauthorized benefit	Often lacks specific intent, although, it still leads to improper payments or inconsistent practices with accepted standards; arises from recklessness, lack of proper oversight, or ignorance of correct billing guidelines and procedures.
Financial Impact	Generally more severe due to criminal intent; high-level risk	Abuse can lead into fraud if intent to deceive is later established
Examples	Upcoding, billing for higher levels of care than was actually provided Phantom billing Unbundling services that should be reported and billed together as a single procedure to maximize reimbursement Kickbacks and illegal referrals Falsifying patient information to justify medically unnecessary services or procedures Double billing Misrepresentation of the individual rendering the service	Misusing codes on a claim Billing excessive charges for services or supplies beyond what is usual, reasonable and customary Billing for services and procedures that do not meet medical necessity guidelines and criteria Routinely waiving patient deductible or co-payments without proper justification Referring patients to facilities in which they have a financial interest without meeting designated exceptions Paying for referrals
Overall Impact	Can lead to significant losses and undermine care quality; impacts perception of the integrity and value of the healthcare system; and depletes valuable resources	Can lead to significant losses and undermine care quality; impacts perception of the integrity and value of the healthcare system; and depletes valuable resources

Minimization of Risk Strategies

Effective prevention includes understanding fraud and abuse laws, implementing compliance programs, appointing compliance officers, providing ongoing education, maintaining reporting hotlines, conducting internal and external audits, and addressing violations with appropriate disciplinary actions. Compliance must be actively practiced and continuously improved to minimize risks and ensure proper billing, coding and documentation of services performed.

Healthcare Fraud and Abuse Prevention Tips

• Protect your health insurance ID card and information. Be informed, review policy and benefit information, and keep records of medical care.
• When an individual receives a bill for healthcare services appearing questionable or inappropriate, an inquiry to the provider should be made to obtain clarification regarding the services and corresponding charges.
• Review explanations of benefits (EOBs) when received for accuracy of information, and contact the insurance plan if there are concerns related to the billed services.
• Be aware of the too-good-to-be-true offers, such as free consults, free equipment and other free healthcare services.

Healthcare fraud and abuse is a serious crime impacting everyone and should concern everyone. The landscape of healthcare fraud, abuse and waste prevention is evolving with technological advancements and regulatory reforms. Collaboration among investigative agencies continues to strengthen efforts to identify and combat fraud and abuse. Remaining vigilant, adaptable and addressing issues requires a concerted effort from all stakeholders to safeguard the integrity and sustainability of healthcare services.

Background

ClaimDOC’s comprehensive line-by-line review of claims uncovers errors that basic claim repricing and auto-adjudication fail to catch, leading to greater savings for health plans and plan members. Our audit team analyzes all types of healthcare claims for a variety of potential concerns including excessive usual, reasonable and customary charges; duplication of claims; incorrect coding; unbundling of services; and many other errors. Our claims review is not intended to impact care decisions or medical practice.