Fraud in the Medical Field

by tylercook on January 2, 2013

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Fraud in the medical field hurts every single American because it leads to increased costs in an already expensive healthcare industry. Some estimates put the cost of fraud at around $100-$110 billion per year. These increased costs damage our economy and our medical institutions. These criminal schemes can take many forms, but they are almost always done in order to defraud private insurance companies, patients, and most often, Medicare out of large amounts of money. How exactly does someone defraud the healthcare system, and what happens when it is discovered? Who is looking for fraud in healthcare?

Corruption in Medicine

Some of the most common medical fraud involves billing for procedures that are never performed, billing for procedures that are extremely expensive, and ordering excess, unnecessary testing in order to pad the bill. Sometimes the scheme is used to cover procedures or tests that are not actually covered by the patient’s insurance. For example, if a medical clinic or hospital performs a test on a patient that is not covered by insurance, they could bill for a similar procedure that costs about the same and is covered under the patient’s policy.

There are also schemes that involve duplicate billing. The sheer number of claims sent to insurers means that duplicate bills can easily slip through the cracks. Some providers know how to work the system to avoid detection and collect significant money from double billing. In addition, an enormous black market for prescription pain medication has led to a rise in fraud involving the illegal sale of prescription drugs. No matter what the form of medical fraud, the damage done to the consumer, taxpayer, and society as a whole is enormous. So who is out there to catch these crooks?

Whistleblowers and Convictions

The most extreme examples of medical corruption usually involve Medicare fraud. Medicare is a massive entitlement program that until recently did not have sufficient safeguards in place to catch fraud. There has been some progress in fixing some of the holes that are commonly exploited, and money has been added for enhanced fraud investigation, but there is still progress to be made. This increased attention to fraud has led to more convictions and the recovery of some money.

For instance, in December of 2012, two Florida men pled guilty to defrauding Medicare out of $48 million over the last six years by charging for home health services that were never provided, and in some cases, not even necessary. They were caught by the Medicare Strike Force. The Medicare Strike Force, created in 2007, has charged nearly 1500 people with Medicare fraud for a combined total of nearly $5 billion in potentially fraudulent charges to Medicare.

Anyone within an organization that suspects Medicare fraud can report that activity for investigation which could lead to fines and/or jail time. This can result in a reward if the report leads to a recovery of Medicare monies.

The only way to put a dent in corruption in the medical field is for ordinary citizens to do their part. Patients must inspect every bill to ensure accuracy. Workers in the medical field must report any suspicious billing activity to law enforcement. Unless we all work together to identify and stop the fraud, we will all continue to pay for the fraud in the form of higher insurance premiums and increased costs for medical services.


This piece was contributed by Roy McClure, a freelancer based in the greater metro area of Boise; for those who have legal needs pertaining to fraud in the medical field, be sure to visit False Claims CA as they possess extensive experience in this area.




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