It takes a village to maintain your health insurance coverage. That village includes the health insurance company in charge of your plan, the network of doctors and hospitals that manage your care, the employer who might offer you group coverage, and the state and federal governments that provide mandatory benefits and possible tax credits to you and your employer.
And no matter who pays for coverage — whether it’s you, your employer, or the government — everyone is affected by healthcare fraud.
What Is Healthcare Fraud?
Healthcare fraud includes the use of false information — via medical records or medical claims — to receive payments from private health insurance companies or public health programs (like Medicare and Medicaid). Fraud can be committed by healthcare providers or organized criminal groups.
Simply put, healthcare fraud creates higher costs for everyone. To make up for massive losses (up to $272 billion) caused by healthcare fraud, insurance companies have to charge more for coverage. That translates to greater business costs for employers and public programs, plus higher premiums and out-of-pocket costs for individuals.
The Most Common Types Of Healthcare Fraud
Healthcare fraud can be committed in multiple ways. Below are the most common types of fraud schemes.
Falsifying a patient’s diagnosis
This allows a healthcare provider to prescribe medications or recommend procedures, such as testing or surgery, that are medically unnecessary. The patient’s diagnosis code may be “inflated” to a more serious condition so that the provider can bill for higher-priced services or prescriptions.
Billing for services that were never used
This type of fraud is typically carried out in one of the following ways:
- Stealing patient information to make false insurance claims or obtain prescriptions for controlled medications.
- Claiming services that were never carried out, like health screenings, test, or in-home doctor visits.
- Deliberately using an incorrect code to bill for services rendered.
- Producing phony invoices for services or prescription medications.
Misrepresenting treatments as being covered by a plan
A healthcare provider may claim that a service is covered by the patient’s health insurance plan. However, if the service is not covered by the insurance provider, the patient is responsible for footing the cost of the bill.
Coding separate parts of a procedure
Known as “unbundling” or “fragmentation,” a healthcare provider could enter individual codes for separate steps of a procedure, instead of using a single code for the entire procedure. This can result in a much higher bill for a medical service or procedure.
Billing a patient for pre-paid or discounted services
The provider may charge a patient for services, even if those services are partially or fully covered by the patient’s health insurance plan.
How Fraud Affects You
First, there are the added costs to anyone with health insurance coverage, in the form of higher fees, premiums, and out-of-pocket costs.
Second, there is a possibility of receiving false diagnoses, treatments, and/or medical histories. This type of fraud is very dangerous, as fake or inflated diagnoses may result in incorrect treatment or prescribed medications. Plus, these diagnoses show up on medical records, which may affect your eligibility for employment or life insurance.
Third, false claims count toward your limited health insurance benefits. Some private plans have lifetime caps. If a false claim is paid in your name, that dollar amount gets added to your lifetime cap.
How You Can Avoid Healthcare Fraud
Considering that $2.7 trillion is spent on healthcare in America, healthcare fraudsters can slip through the cracks. However, there are steps you can take to reduce the risk of being a victim of healthcare fraud.
Safeguard your health insurance ID
Think of your health insurance card like a credit card. Don’t share your member ID number or information with anyone except your healthcare or insurance provider — especially not to solicitors online or over the phone.
Report suspicion of fraud
If you lose your insurance ID card, or if you think you have been a victim of healthcare fraud, call your insurance company ASAP.
Be critical of healthcare services you receive
Before you receive services, tests, or treatments, ask your healthcare provider which services you are receiving. Then cross-check those services with your medical bill and Explanation of Benefits (see below) to make sure there were no added services or charges.
Read your Explanation of Benefits (EOB)
The Explanation of Benefits (EOB) is a summary of services and charges for a visit to your healthcare provider. The EOB is not a medical bill, as the bill will be sent separately by your healthcare provider. Instead, the EOB shows you the services rendered, the cost of each of those services, and a breakdown of which portion of those charges will be covered by you and your insurance plan.
Next time you visit your healthcare provider, look carefully over the EOB and medical bill. Ask these questions:
- Did you actually receive the services you were charged?
- Does each service include a date of service?
- Are there any listed services that look unfamiliar to you?
If anything looks suspicious or unfamiliar, call your insurance company. The insurer can follow up with your healthcare provider to make sure you were billed correctly.
Talk to an agent at Regency West
Regency West is a San-Diego based agency that finds affordable health insurance plans for business owners, employees, individuals, and families. As licensed health insurance agents, we make sure you feel safe and secure with your insurance policy. We’re in the business of healthcare, after all!
If you have questions about health insurance coverage, and how to protect yourself from healthcare fraud, get in touch with us today! Just call (858) 699-0286 or visit us at RegencyWestInsurance.com. We want to help you get the most from your healthcare coverage!