Health insurance fraud hurts everyone, not just insurance companies or individual victims. In fact, it costs Americans nearly $54 million annually1. Read on to learn more about what fraud looks like, how to prevent it, and what to do if you notice suspicious activity.
In early April, ten south Florida residents were indicted in Federal Court for fleecing more than $5 million from Medicare through fraudulent claims. Their scheme involved providing kickbacks to Medicare patients in exchange for falsely indicating they had received expensive AIDS and HIV medication.2
Unfortunately, this is not an isolated case. Insurance fraud in the United States is reaching epidemic proportions. According to the National Insurance Crime Bureau (NICB®), the average U.S. household pays $300 a year in higher premiums in order to offset fraudulent claims.3
By arming yourself and your clients with the right knowledge, you’ll know how to spot, and help stop medical insurance fraud.
Is it fraud or abuse?
What may appear to be health insurance fraud may often be abuse. Here’s the difference: fraud is the act of making a false statement to issue a contract or pay a claim. Health insurance abuse may or may not be fraudulent, but always works to increase revenue. Examples of abuse are unfair pricing, or performing unnecessary lab tests on large numbers of patients. Abuse is similar to fraud except that it is not possible to establish criminal intent.
“Most providers, probably 98 percent, do not defraud or abuse the system,” says Karen L. Schwabacher, president of Schwabacher Health Insurance Consulting, Inc. “It’s the 2 percent who do that we’re dealing with 98 percent of the time.”
Schwabacher’s company provides medical claims review and training to companies involved in health claims decisions. She says fraud is difficult to detect because most providers go unnoticed by billing reasonable dollar amounts.
“A practitioner’s greed is generally what places them on the radar,” says Schwabacher.
Provider fraud hurts not only insurance companies and individuals who have been targeted, but the average person, as well. The costs are paid for in the form of higher premiums, or in the case of government insurance like Medicare, higher taxes. And insurance isn’t the only industry affected — everyday goods and services increase in price, too.
Here are some common scams to watch for:
- Substandard care. Substandard care may include improperly treating or misdiagnosing an illness, or providing less-costly alternatives to minimum treatment standards.
- Unnecessary treatment. An especially alarming trend is the willingness of dishonest providers to risk a patients’ health by performing unnecessary treatment, including surgery.
- Billing for Goods/Services not Provided. Patients may be billed for treatments and procedures they never actually received. Make sure to review the Explanation of Benefits (EOB) following a doctor’s visit and look for common things such as, X-rays, lab tests and medication that may not have been provided.
- Rolling labs. Needless and often phony tests are given to patients at random locations, such as shopping mall parking lots and spas, and billed to insurance companies or Medicare.
- Runners. “Runners” receive money for recruiting individuals to participate in insurance fraud. Runners commonly troll through low-income neighborhoods and lure residents to local clinics — often rolling labs — for fake medical tests.
- Double billing. Fraudulent providers may double or triple bill health insurers for the same treatment, hoping the insurer is too busy and buried in paperwork to notice.
- Identity theft. Medical identity theft occurs when a thief steals a medical ID number and makes false claims. Medical identity theft can be especially hard to recover from, as it usually leaves a trail of falsified information in the victim’s medical records.
If you or your clients suspect insurance fraud involving a Symetra policy or claim, please send an e-mail to Symetra's Special Investigations Unit or call (425) 256-6000. All other suspicious activity should be reported to the National Insurance Crime Bureau or by calling the NICB hotline at 1-800-TEL-NICB.
For a list of state insurance regulators, please visit the government’s Consumer Action Web site.
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