Healthcare fraud schemes have cost the U.S. government, taxpayers, and insurance companies nearly $100 billion annually. If you think the government isn’t taking any alleged fraud seriously, – or anything that even resembles fraud – think again.
According to the National Health Care Anti-Fraud Association, Medicare and Medicaid fraud has cost taxpayers hundreds of millions. How is it possible to defraud the government for medical care?
Common healthcare scams in the U.S.
Healthcare fraud can be big business, according to the government: dummy corporations billing Medicare and Medicaid for fake COVID tests, non-existent medical equipment, and even fraudulent genetic testing. Fraudsters may even invent patients, billing the government and other insurance companies for services for people who don’t exist.
Less-bold healthcare schemes may include billing for tests that weren’t run or fake appointments for existing patients. In these cases, an unscrupulous doctor may bill more procedures than they actually performed, receiving reimbursement from the insurer.
Overbilling is another common type of fraud, charging an insurance company more for procedures and services than the “retail” price of the services.
Medical identity theft
Fraud committed using the names of existing patients is considered medical identity theft. It’s committed when someone uses a patient’s name and social security number to submit fraudulent claims to an insurance company or Medicaid without their consent.
Financial impact of healthcare scams
The U.S. Department of Health and Human Services (HHS) oversees Medicaid and Medicare. In 2021, 0.02 of every dollar of the HHS’s budget was allocated for oversight and fraud investigation.
Medicaid and Medicare together cover roughly 150 million beneficiaries, with annual spending of more than $1.635 trillion, so even just a couple of pennies on the dollar adds up to a substantial fraud oversight budget. Even with $32.7 million to spend for oversight, more and more fraudsters slip through the bureaucratic cracks.
What’s causing the recent rise in U.S. healthcare scams?
Because there are just so many people on Medicare and Medicaid rolls, and because now nearly everyone in the U.S. has health insurance, thanks to the Affordable Care Act, there may be just too many patients for oversight and regulatory bodies to keep up with.
The rise in healthcare schemes is tied to just how easy it is for swindlers to rip off the government. A typical “shell” doctor’s office or dummy medical equipment sales facility may purchase a list of patient information obtained through identity theft. These may be legitimate Medicaid recipients or otherwise insured, but the services being billed by the fraudsters aren’t.
Healthcare scams affect everyone
Everyone pays for medical fraud. The more the government wastes on Medicaid and Medicare fraud, the more it costs taxpayers. It’s similar to how the stores pass along shoplifting costs to consumers. Higher medical costs also mean higher insurance premiums.
It can also directly affect patients. If certain false tests or procedures are billed to legitimate patients, they could show up on the patient’s health records. This affects how a patient is diagnosed, either by a missed diagnosis of a legitimate medical issue or by diagnosing someone with an illness they don’t have.
Detecting healthcare scams
Detecting healthcare fraud is challenging. The patients themselves may not know enough to detect waste or fraud, so for the most part, it’s up to the payers to verify legitimate costs. Even for payers familiar with the average cost of medication, devices, and procedures, there are challenges. Doctors have different billing systems, so a variation from one provider to another doesn’t necessarily indicate fraud.
Data analysis and AI using large data sets can determine when and where healthcare fraud occurs or is likely to occur. A data visualization platform can hone in on suspicious activity to help with billing audits.
Preventing healthcare scams
Healthcare providers have a serious responsibility to safeguard their patient’s personal information and data. Although many providers may have strict HIPAA best practices, protecting general information like names, birthdates, and even a social security number may be overlooked. Hackers may access a doctor’s office’s electronic records system and get a list of patient information, which they can then sell to insurance scammers.
Raising awareness, from major hospital systems to small-town general practitioners, about the extent of fraud is the first step. Healthcare providers should protect their networks with better security and encryption of patient records. An audit of the network security and improving protection from a data breach is the next step.
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