More than 4 billion claims are filed every year. Who is most responsible for most fraud? Some of it does come from consumers filing false claims or misrepresenting information on insurance forms. But this is only about 10%, as seen in the graphic above. According to a 1999 study by the Health Insurance Association of America, nearly three quarters of health care fraud cases come from medical professionals: doctors, dentists, and chiropractors. The most common types of fraud involved billing for services that were never provided and something known as "upcoding" — when providers submit bills for procedures that are more expensive than those actually performed.
Some examples? In October 2001, a federal grand jury returned a 407-count indictment against 19 defendants in Arizona who allegedly set up fraudulent store fronts for durable medical equipment suppliers. In May 2002, a Colorado chiropractor was sentenced for submitting approximately $219,000 in false claims to Medicare. In October 2002, a Florida dental surgeon was charged with false billings to Medicaid of $163,000. She submitted claims for treatments she never performed, overbilled for others, and filed claims for medication her patients never received. One patient described it as "an assembly line" with oral surgeries performed on a steady line of low-income patients — often without anesthesia.
There have been some encouraging signs in the fight against health care fraud. According to a study by the Coalition Against Insurance Fraud, which examined the fraud bureaus of 41 states, fraud convictions increased from 961 in 1995 to 2,123 in 2000. Two-thirds of the bureaus also reported budget increases. The U.S. Attorney Office's largest recovery in 2000 came from National Medical Care, Fresnius' kidney dialysis subsidiary, which paid $379 million in criminal fines and civil payments in fraud charges against Medicare. Where does the nation's Medicare program stand on the fraud issue? In 1996, Medicare overpayments accounted for 14 cents out of every dollar spent, or $23 billion. In 1998, about seven cents of every dollar spent was on fraud, waste, and mistakes, or $12.6 billion. Some good news, although that figure jumped to $13.5 billion in 1999. Reportedly, the percentage of bills Medicare claims that are audited increased from 5% to 14%.
What of other types of insurance fraud? The Coalition Against Insurance Fraud estimated that in 1996 fraud hit $14.3 billion in auto insurance, $10.6 billion in business and commercial insurance, $2.1 billion in home owners insurance, and $2.1 billion in workers compensation. The figures, the organization readily admits, are guesswork. But it makes one wonder…
Sources: Chart data comes from the Health Insurance Association of America, based on a 1999 survey conducted with the assistance of the Blue Cross and Blue Shield Association and the National Health Care Anti-Fraud Association. Bender, J.P. "Waste, Fraud Cost Medicare $13.5B Last Year." Denver Business Journal, May 5, 2000, p. 18A; "Federal Campaign enlists seniors as Medicare fraud busters." Retrieved from http://www.cnn.com; "United States Attorney's Office recovers record-breaking $379 million in fiscal year 2000." Retrieved from http://www.prnewswire.com, January 8, 2001; Curtis M. Wong. "Growing Complexity of Scams a Challenge for Investigators." Business Insurance, September 17, 2001, p. 12B; Michael Prince. "High-Tech Tools Aid Insurers in Fighting Health Care Fraud." Business Insurance, September 17, 2001, p. 12E; "Dental patients hardly smiling about treatments." Retrieved from http://www.insurancefraud.org; "Denver chiropractor sentenced for health care fraud." Retrieved from http://du.edu/usaoco/052302Frame1Source1.htm; Daniel Hays. "Claim Fraud Slowing, But Some Raise Doubts." National Underwriter, January 4, 1999, p. 6.
User Comments Add a comment…