What is Health Care Fraud?

Health care fraud refers to the crime of the intentional falsification of information that is to be submitted to an entity for the express purpose of receiving payment for health care services or equipment. It is considered a "white-collar" crime. The targeted entity is almost always a health insurance company, but it also can be a branch of government that provides health care. There are a variety of ways in which medical services fraud can be committed. Most of them involve falsifying information on an insurance claim.

Patients as well as doctors and suppliers of medical equipment have been found to knowingly participate in health care fraud, which contributes to the rising costs of health care services, equipment and prescription medications. Those persons' criminal actions might be profitable for the patient, for the doctor or other health care provider or for the medical supplier. One form of health care fraud is committed when a patient's diagnosis is falsified to justify the performance of tests, treatments, procedures and even surgery that is not medically necessary. For example, medical insurance companies generally do not offer coverage for cosmetic surgery, but a cosmetic surgeon might falsify the claim submitted to an insurance company in order to receive payment.

Other ways in which some dishonest people commit health care fraud involve submitting insurance claims for more expensive services, treatments or procedures than those that were actually rendered. This is sometimes accomplished by a technique known as upcoding. Codes for services, treatments and procedures that are closely related to a specific illness or condition but that are different in price can be intentionally "confused" when reported on claims. Health care fraud also is committed when billing for a single treatment, procedure or service is done in unnecessary stages, leading to multiple payments for what should have been paid in only one payment.

Modifying patient co-payments and deductibles established by the covering insurance company is another form of health care fraud. Sometimes these payments are waived and the claim changed to collect more money than what should be collected to cover the patient's out-of-pocket expenses. Health care fraud has even extended to the black market. When a person gets a fully covered prescription filled for the purpose of selling the drug for profit, he or she commits health care fraud. Beneficiaries of health care benefits can help to reduce fraudulent activity by reporting their suspicion of fraud, which usually can be done anonymously.