Ways To Prevent Insurance Fraud

Insurance fraud is any act made to deceive an insurance procedure. It occurs when a claimant attempts to obtain some benefit or advantage they are not entitled to, or when an insurer knowingly denies some benefit that is due. It is also a deliberate deception perpetrated against or by an insurance company or agent for the purpose of financial gain. Fraud may be committed at different points by applicants, policyholders, third-party claimants, or professionals who provide services to claimants. Insurance agents and company employees may also commit insurance fraud. Common frauds include “padding,” or inflating claims; misrepresenting facts on an insurance application; submitting claims for injuries or damage that never occurred; and staging accidents.
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People who commit insurance fraud include:

• organized criminals who steal large sums through fraudulent business activities,
• professionals and technicians who inflate service costs or charge for services not rendered, and
• ordinary people who want to cover their deductible or view filing a claim as an opportunity to

Inside the healthcare industry lies good opportunity for insurance fraud as well. Insurance fraud causes tens of billions of dollars in losses each year. It can raise health insurance premiums, expose you to unnecessary medical procedures, and increase taxes. If you’re in the healthcare industry, you must learn to identify what are the common types of healthcare and insurance fraud.
Common types of healthcare and insurance fraud:
1. Fraud Committed by Medical Providers

• Double billing: Submitting multiple claims for the same service
• Phantom billing: Billing for a service visit or supplies the patient never received
• Unbundling: Submitting multiple bills for the same service
• Upcoding: Billing for a more expensive service than the patient actually received
  

2. Fraud Committed by Patients and Other Individuals

• Bogus marketing: Convincing people to provide their health insurance identification number and other personal information to bill for non-rendered services, steal their identity, or enroll them in a fake benefit plan
• Identity theft/identity swapping: Using another person’s health insurance or allowing another person to use your insurance
• Impersonating a health care professional: Providing or billing for health services or equipment without a license
  

3. Fraud Involving Prescriptions

• Forgery: Creating or using forged prescriptions
• Diversion: Diverting legal prescriptions for illegal uses, such as selling your prescription medication
• Doctor shopping: Visiting multiple providers to get prescriptions for controlled substances or getting prescriptions from medical offices that engage in unethical practices

 
How to Prevent Insurance Fraud?
 
The Affordable Care Act of 2010 included fraud-fighting efforts, such as allowing the U.S. Department of Health and Human Services (HHS) to exclude providers who lie on their applications from enrolling in Medicare and Medicaid and the Improper Payments Elimination and Recovery Act, which requires agencies to conduct recovery audits for programs every three years and develop corrective action plans for preventing future fraud and waste.
Other efforts included:

• Implementing an Automated Provider Screening system to review enrollment applications;
• Allowing HHS to impose a temporary moratorium on newly enrolled providers or suppliers, if necessary to combat fraud;
• Authorizing the Centers for Medicare and Medicaid Services, in conjunction with the Office of the Inspector General, to suspend payments to providers or suppliers during the investigation of a credible allegation of fraud; and
• Ensuring that providers and suppliers found guilty of fraud in one of the Centers’ systems, such as Medicare, cannot have service privileges in another area, such as Medicaid, or within state programs.

 
Additionally, in 2012, HHS and the Department of Justice formed the National Fraud Prevention Partnership to combat health care fraud. The group also consists of private and public groups such as health care companies and their organizations, the National Association of Insurance Commissioners, the National Insurance Crime Bureau and the National Health Care Anti-Fraud Association. The groups will share information on claims from Medicare, Medicaid. and private insurance to be administered by a third-
party vendor.
 
Fraudulent acts have no escape with the law. Whether you’re a healthcare provider trying to slip away money from your clients, or a client who doesn’t one to compensate the services provided to you.  Either way, one must be vigilant enough to take part in protecting his/her right and preventing these things to happen.  Keep all your records intact and avoid providing your information to anyone asking for it. Always verify, verify, verify!
 
Reference

Background on: Insurance fraud. III. (n.d.). Retrieved June 18, 2022, from https://www.iii.org/article/background-on-insurance-fraud