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What Is Healthcare Fraud?

April 1, 2022 Uncategorized

Healthcare fraud may appear to be a victimless crime, but it affects every person in the United States. According to the Department of Justice, healthcare fraud costs $80 billion per year. There are many types of healthcare fraud, and they may be committed by physicians and other healthcare personnel, hospital administrators, insurance companies and healthcare consumers. Understanding what healthcare fraud is and how it affects everyone is essential to identifying and stopping this costly and serious crime.

What Is Healthcare Fraud?

Healthcare fraud is an intentional and unlawful deceit or misrepresentation for the purpose of receiving unauthorized healthcare or financial benefits for the delivery of healthcare services or prescription drugs. The Federal Bureau of Investigation (FBI) investigates all cases of healthcare fraud. The FBI recognizes that occasional errors and mistakes happen. An unintentional error when filling out a form, submitting billing information or filing a claim or benefits request is not healthcare fraud.

What Are the Types of Healthcare Fraud?

There are four primary types of healthcare fraud:

  • Snake-oil marketing
  • Health insurance fraud
  • Drug fraud
  • Medical fraud

Snake-oil Marketing

Snake-oil marketing refers to the promotion of medications, drugs, supplements and remedies. The marketing is deceptive to the consumer. The consumer is led to believe that the remedy will cure a specific problem or an array of problems. One website, operated by a nonprofit organization, monitors cases of quackery and provides information to the public and to healthcare providers.

Health Insurance Fraud

Individuals, healthcare practitioners, hospital administrators may commit health insurance fraud. This involves billing for services not rendered. It can also involve billing for a service priced higher than what was actually performed. An individual may commit health insurance fraud by misrepresenting their income when applying for public health insurance benefits. An individual may commit healthcare fraud by using someone else’s identity in order to receive healthcare benefits. Health insurance fraud includes Medicare fraud. Medicare fraud involves claiming reimbursement for services that were not rendered or received.

Sub-types of Healthcare Insurance Fraud

Within health insurance fraud, there are additional sub-types of fraudulent activity that are of interest to the FBI. They include:

  • Unbundling of services
  • Duplicate billing
  • Upcoding of products or medications
  • Unnecessary services
  • Kickbacks

Drug fraud

Prescription drug fraud includes “pill mills”, which are healthcare facilities that give people prescriptions without performing the necessary exam or medical tests. The prescriptions are typically for opioid pain relief drugs. In one famous case of drug fraud, the Department of Justice prosecuted a physician who distributed more than 78,000 hydrocodone pills to patients who were incarcerated or deceased.

Sub-types of Drug Fraud

Under the umbrella of drug fraud, there are a few sub-types of interest to the FBI:

  • Shorting: This is delivering fewer pills or a smaller amount of drug for which the patient was billed
  • Passing off a cheap generic as an expensive name-brand prescription drug
  • Providing a patient with placebos instead of an active prescription drug

Medical Fraud

Medical fraud occurs when a person fraudulently practices medicine or pretends to have skills which they do not. Another term for this is “quackery.” A current example of medical fraud is Elizabeth Holmes, who founded Theranos. As of November 2021, the FBI continues to prosecute the fraud case against Ms. Holmes. Holmes claimed that her company’s products could provide a type of medical treatment that is currently impossible. In September 2021, the FBI prosecuted 42 healthcare providers for quackery. The sum of their fraud was more than $1.1 billion.

How Is Healthcare Fraud Investigated?

The FBI investigates cases of healthcare fraud. In some cases, state and local authorities are also involved. Other law enforcement agencies, such as the Drug Enforcement Authority (DEA) or Bureau of Alcohol, Tobacco and Firearms (ATF) may be involved in healthcare fraud investigations. A healthcare fraud case may begin with whistleblower reports. It may also start with consumer complaints. An astute auditor, administrator, billing specialist or financial analyst may make a discovery and report it. Healthcare fraud investigations may also begin with unusual patterns of prescriptions, billing or claims that do not match historical records or patterns of activity.

If you find yourself facing healthcare fraud charges, it’s important to seek legal representation. These charges are serious and can result in extensive fines, jail time and a loss of professional license to practice in healthcare or finance. An attorney will inform you of your rights and work on your behalf to defend you against healthcare fraud charges.

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