Health insurance is meant to safeguard us from the hefty medical expenses that come with illness or injury. However, some people abuse the system by committing health insurance fraud, which is defined as the deliberate deception or misrepresentation of information to obtain healthcare benefits or to gain a financial advantage. Fraudulent activities can range from exaggerating symptoms to submitting fake claims, and they can happen to anyone, regardless of age, gender, or social status.
Types of Health Insurance Fraud
Insurance fraud can take many forms, but the most common ones are:
Type of Fraud |
Description |
|---|---|
Phantom Billing |
Charging for services that were not rendered, such as billing for multiple office visits that never happened. |
Upcoding |
Using a billing code that represents a more expensive service or treatment than the one actually provided. |
Unbundling |
Separating a single service into several components and billing each one separately to get a higher reimbursement. |
Exaggerated Symptoms |
Pretending to have a more severe condition to qualify for a treatment or medication that is not medically necessary. |
Prescription Fraud |
Falsifying prescriptions to obtain drugs for personal use or resale. |
Phantom Billing
Phantom billing is one of the most common types of health insurance fraud, and it can happen in various settings, such as hospitals, clinics, or pharmacies. The fraudster creates billing statements for services that were not rendered, and submits them to the insurance company for reimbursement. For example, a doctor may bill for multiple office visits that never happened, or a clinic may charge for diagnostic tests that were never performed. This type of fraud can cause significant financial losses to the insurance company, and can also affect the patient’s credit score if the unpaid bills are sent to collection agencies.
To protect yourself from phantom billing, always check your Explanation of Benefits (EOB) carefully, and make sure that the services listed were actually provided to you. If you notice any discrepancies, contact your insurance company immediately, and ask for an investigation. Also, keep a record of all your medical appointments, tests, and procedures, and compare them with the bills you receive from your healthcare providers.
Upcoding
Upcoding is a practice where a healthcare provider uses a billing code that represents a more expensive service or treatment than the one actually provided. For example, a doctor may bill for a complex surgery when he only performed a minor procedure, or a hospital may charge for a private room when the patient stayed in a shared room. This type of fraud can result in overpayments by the insurance company, and can also expose the patient to unnecessary risks and expenses.
To prevent upcoding, ask your healthcare provider to explain the billing codes used for your treatment, and make sure they match the services you received. You can also check the Medicare Physician Fee Schedule or the Current Procedural Terminology (CPT) codes to see the typical prices for different medical procedures. If you suspect that you have been upcoded, report it to your insurance company, and ask for a review of the charges.
Unbundling
Unbundling is a scheme where a healthcare provider separates a single service into several components, and bills each one separately to get a higher reimbursement. For example, a laboratory may charge for each blood test instead of bundling them together, or a radiology center may bill separately for each X-ray image. This type of fraud can also lead to overpayments, and can make the patient’s out-of-pocket expenses higher than necessary.
To avoid unbundling, ask your healthcare provider to bundle all the services related to your treatment into a single bill, and make sure that the total amount is reasonable and comparable to other providers in your area. You can also check the Healthcare Common Procedure Coding System (HCPCS) codes to see how services are bundled together for billing purposes. If you notice any unbundled charges, report them to your insurance company, and ask for a recalculation.
Exaggerated Symptoms
Exaggerating symptoms is a form of health insurance fraud where the patient pretends to have a more severe or urgent condition than the one actually present, in order to qualify for a treatment or medication that is not medically necessary. For example, a person may fake a back injury to get a prescription painkiller, or a parent may fabricate a child’s symptoms to get a school exemption. This type of fraud is not only illegal, but can also harm the patient’s health by delaying or interfering with the proper diagnosis and treatment.
To discourage exaggerated symptoms, be honest and accurate about your medical history and current condition, and do not overstate or downplay your symptoms. If you think that a treatment or medication is not necessary or appropriate, discuss it with your healthcare provider, and ask for alternatives. If you suspect that someone is using exaggerated symptoms for fraudulent purposes, report it to the appropriate authorities, such as your insurance company or the Department of Health and Human Services.
Prescription Fraud
Prescription fraud is a type of health insurance fraud where the patient or the provider falsifies prescriptions to obtain drugs for personal use or resale. For example, a person may forge a doctor’s signature on a prescription pad, or a doctor may write a prescription for a fake patient or a non-existent condition. This type of fraud can have serious consequences, such as addiction, overdose, or death, and can also contribute to the rise of drug abuse and trafficking.
To prevent prescription fraud, only use prescription drugs as directed by your healthcare provider, and do not share or sell them to others. If you think that you have been prescribed an excessive amount of medication, or that the medication is not effective or safe, talk to your healthcare provider, and ask for a second opinion if necessary. If you suspect that someone is using prescription fraud, report it to the Drug Enforcement Administration (DEA) or your state’s health department.
Frequently Asked Questions
What are the consequences of health insurance fraud?
Health insurance fraud can lead to various penalties, such as fines, imprisonment, license revocation, and exclusion from federal healthcare programs. In addition, the fraudster may have to pay back the money they obtained through fraud, and may also face civil lawsuits from the insurance company or the affected patients. Health insurance fraud can also cause reputational damage to the healthcare provider or the patient, and can affect their future job prospects or insurance coverage.
How can I report health insurance fraud?
If you suspect that you have been a victim of health insurance fraud, or that you have witnessed fraudulent activities, you can report it to your insurance company, the National Insurance Crime Bureau (NICB), or the Office of Inspector General (OIG). You can also file a complaint with the Federal Trade Commission (FTC) or the Department of Health and Human Services (HHS). To report prescription drug fraud, you can contact the DEA or your state’s health department.
How can I protect myself from health insurance fraud?
To protect yourself from health insurance fraud, be informed and vigilant about your healthcare services and bills, and ask questions if you have doubts or concerns. Keep a record of all your medical appointments, tests, and procedures, and compare them with the bills you receive from your healthcare providers. Review your EOBs and insurance policies regularly, and make sure that you understand the terms and coverage. Avoid sharing your personal and medical information with strangers or unverified sources, and report any suspicious activity to the appropriate authorities.
Can health insurance fraud happen to me?
Yes, health insurance fraud can happen to anyone, regardless of age, gender, or social status. However, there are some factors that may increase the risk of fraud, such as having a chronic or expensive medical condition, using multiple healthcare providers, or living in an area with high fraud rates. Nevertheless, by being vigilant and proactive, you can reduce the likelihood of falling prey to health insurance fraud, and protect yourself and your wallet.