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5 common medical insurance frauds

May 6, 2015 by  
Filed under Blog

Medical insurance frauds committed by unethical doctors and medical institutions are not uncommon, and often go unnoticed because patients are concerned only with getting better quickly and inexpensively. Insurance fraud investigators have encountered incidents where insurance companies are commonly billed for services that not provided or when non-covered services are provided under the umbrella of covered services, when dates, locations or providers of the services are not mentioned correctly, and when medical conditions are “unbundled” into several smaller conditions for the purpose of treating and billing them separately. Let’s go over 5 typical cases.

Billing for non-existent services

The most common kind of medical insurance fraud, this is made possible by “losing” the patient’s files that the frauds claim to have treated. On the bill, a certain patient has been prescribed a certain treatment, whereas that patient never entered the treatment facility, or perhaps does not even exist. Various reasons are then given for the missing files, such as fires, computer viruses, electrical outage etc. These frauds are deconstructed by carefully and objectively looking for logs of a suspicious patient having been in the facility. If none are found and subsequent interviews yield discomfited and unusually reserved doctors, it could indicate a problem.

Billing for non-covered services

This kind of fraud can only be made possible through the connivance of doctors, who list a non-covered service as a covered one on the bill. This is often done in order to finance experimental or unapproved treatments, since these are difficult to obtain insurance coverage for. Impatient doctors and patients looking only for effective results instead of government approval are likely to agree to this practice, which is sometimes identified by excessive treatments, such as four to five sessions a week.

Wrongly identifying the place, time and provider of service

If you encounter a clinic that hands you a bunch of injections that you can self-administer as home, you may have found an example of this kind of fraud. If the doctors are then mentioning that they personally administered these injections in their clinics on the billing form (which will probably include a fabricated time of service as well), then they are not just committing fraud – they are putting the lives of their patients at risk, since the patients need to be observed for some time after the injection for any side effects.

 Unnecessary or fake prescriptions

Many drugs are more valuable on the street than in a pharmacy. Not only does that contribute to robberies in medical stores and the pervasive culture of drug abuse and trade, it also leads to unethical pharmaceutical workers to steal drugs from the stores, and bill insurance companies using counterfeit prescriptions. They commonly “buy” painkillers from their stores, claiming to need them for soreness or other common ailment, and profit from selling them on the street, where their value is nearly ten times more.

Overutilization

This involves taking advantage of the insurance policies of patients with recurring symptoms, such as drug addicts, alcoholics and hypochondriacs, for as long as the policy is valid. Even if they may have recovered satisfactorily, they can still claim treatment for these long term conditions.

It is typical for these lawbreakers to rationalize medical fraud on the basis of helping their patients. However, incidents of corruption and frivolous or counterfeit prescription of medicines are also common. Don’t generalize these incidents, but don’t become complacent either – report any suspected or observed fraudulent activity to the police or insurance fraud investigators immediately.

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