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Friday, November 29, 2013

Fraud in the health care industry

The cost of healthcare fraud is very high
Healthcare fraud amounts to 30.8% of annual spending
By Britni Zandbergen

According to recent FBI reports, health care fraud costs the United States approximately $80 billion dollars annually.  Recent cases have shown that medical professionals are even willing to risk patient’s health in their fraudulent activity.  Americans spend about $2.6 trillion dollars annually on health care, which is part of the reason why fraud in this industry has been on the rise, according to CNBC.

What is health care fraud?

Health care insurance fraud is considered a white collar crime, which involves dishonest claims for health care in order to make money.  Medical practitioners have become more and more involved in health care fraud with schemes where they bill patients for services which were never provided, filing for tests which were never run, and obtaining prescription pills illegally which are covered by insurance, then reselling them on the black market to turn a profit.  Other ways in which medical practitioners have been found committing health care fraud include the modification of patient’s medical records, using unlicensed staff, waiving co-pays illegally, and prescribing additional or unnecessary treatments.

The worst thing about health care fraud is that the perpetrators are never the ones who pay the price.  The cost is always passed on to the patient.  According to the law department at Cornell University, about 10 percent of every single dollar spent by patients for health care will be used to pay off fraudulent health care claims. In addition to the existing fraud committed by healthcare professionals, there are scammers that are taking advantage of the confusion many have over the upcoming healthcare law changes as part of the Affordable Care Act.

In March 2010, President Obama signed the comprehensive health reform, the Affordable Care Act (ACA), into law. Open enrollment for the ACA begins October 1, 2013. The problem with the ACA is that it is quite complex. And fraudsters are taking advantage of the surrounding confusion.

Some of the scams being pulled in relation to the ACA include calling people and claiming to be government workers to acquire personal information.  Other scams include malicious phishing websites that are aimed at grabbing personal information. Once they obtain this information illegally, they can use the information in many ways to commit fraudulent activity. Some of the most targeted groups are the elderly and low income individuals. 

It is important to remember that if someone calls you and claims to be a government employee, they will never ask you to send money, divulge any personal banking information, or offer to send you money.  Never put your personal banking or credit card information on a public computer and be wary of phishing websites which try to steal your information or inject malware programs onto your computer. Legitimate businesses will use a good id verification program to keep your information safe.

There are many ways to protect yourself and your business from becoming the victims of fraudsters and scammers, so be sure to do online research on how to protect yourself.

About the author: Written by Britni Zandbergen, Senior Director of Marketing at Idology.  Britni has years of experience in identity management as well as dynamic SaaS solutions.

Image license: jfcherry, CC BY-SA 2.0