Introduction
Healthcare fraud is a crime with victims who are affected financially or emotionally by such actions. Each year, it results in losses of tens of billions of dollars for both corporations and people. It may result in higher health insurance costs, the need for unneeded medical procedures, and higher taxes. Medical professionals, patients, and others who purposefully mislead the healthcare system to get illegal benefits or payments can all be guilty of healthcare fraud.
Main body
There are several types of health insurance fraud, such as medical identity theft, billing for unnecessary services, upcoding, and unbundling. The use of a person’s medical identity for improperly obtaining medical supplies, services, or money is known as medical identity theft. The phrase “the appropriation or exploitation of a patient’s or provider’s unique medical identifying information to obtain or bill public or private payers for fraudulent medical products or services” is used to define medical identity theft (FBI, n.d., para. 1). Stolen physician identification numbers can be used to fill fake prescriptions, refer patients for pointless additional services or supplies, or bill for services that were not ever rendered.
Billing for items or services that are not necessary is a different form of fraud. States are obligated to provide such techniques and procedures relating to the utilization of, and payment for, care and services offered under the plan as may be necessary to prevent unnecessary utilization of such care and services under Section 1902(a)(30)(A) of the Social Security Act (CMS, n.d.). States may set reasonable restrictions on a service based on factors like medical necessity. Providers make sure that permitted services adhere to the laws of the conditions in which they operate. Intentionally invoicing for services or things that are not necessary can have the negative effects we previously described.
The phrase “upcoding,” not defined in the regulations, refers to invoicing for services that are more complicated than those rendered or recorded in the file. For instance, a provider of durable medical equipment might bill for motorized scooters while offering manual wheelchairs, which are less expensive (CMS, n.d.). Another illustration is when a doctor bills straightforward office appointments at a higher rate than more complicated ones. These actions are fraud since only the level of services or goods rendered should be billed for by providers.
Additionally, there is the practice of unbundling, which is filing bills in a piecemeal manner to maximize reimbursement for multiple tests or operations that must be invoiced collectively at a discounted rate. A panel of blood tests for a patient might be ordered to a lab, which is a good example of this type of fraud (CMS, n.d.). The lab may try to boost its revenue by paying for each test separately rather than for the panel. In a fast-food restaurant, buying a value meal and then getting charged higher individual costs for each item is analogous. It is the responsibility of providers who bill Medicaid to understand which procedures are subject to bundling rules and to bill properly.
Healthcare fraud is punishable, and people engaged in it will be fined. Taking kickbacks, distributing these payments to others, or making false representations can also result in severe civil fines. The Office of the Inspector General at the U.S. Department of Health and Human Services has the authority to impose fines of up to $50,000 for each breach of the Anti-Kickback Statute and $11,000 for each fraudulent claim (“What are the potential penalties,” n.d.). Additionally, the Office of Inspector General has the authority to a fine to quadruple the losses the government sustained due to false claims or kickbacks.
Conclusion
In summary, healthcare fraud includes upcoding, unbundling, charging for superfluous services, and medical identity theft. We already discussed the negative repercussions that might result from purposefully billing for services or items that are not required. Tens of billions of dollars are lost annually as a result of fraud for both businesses and individuals.
References
Centers for Medicare & Medicaid Services (CMS). (n.d.). Common types of health care fraud. Web.
FBI. (n.d.). Health care fraud. Web.
What are the potential penalties for healthcare fraud and abuse? (n.d.). Web.