What is Healthcare Fraud?

What is healthcare fraud? It’s a question that matters more than ever, especially as healthcare costs and regulations continue to rise. Healthcare fraud occurs when a doctor or healthcare facility knowingly deceives a healthcare system, like Medicare, Medicaid, or private insurance companies, to receive unauthorized payments, services, or financial benefits.

Who Commits Healthcare Fraud?

Healthcare fraud is a crime that generally receives the attention of federal investigators and federal prosecutors. The most common group of people to be investigated for healthcare fraud is doctors and other healthcare providers who are in charge of or overseeing claims being sent to insurance providers for payment.

Common Examples of Healthcare Fraud

Understanding how fraud actually plays out can help you spot red flags. Here are a few key examples of healthcare fraud:

• Billing for services not provided: Submitting claims for tests, procedures, or appointments that never occurred.
• Upcoding: Charging for a more expensive service than what was actually performed.
• Unnecessary procedures: Falsifying medical records to justify costly, unneeded treatments.
• Kickbacks: Offering or receiving illegal payments in exchange for patient referrals or business.
• Unbundling: Billing for individual parts of a procedure rather than the full “bundled” procedure, which can result in receiving more money from the insurance provider than would otherwise be paid for the complete procedure.

These schemes may seem small individually, but collectively they cost the healthcare industry billions every year, and harm patients in the process.

Legal Consequences of Healthcare Fraud

Healthcare fraud is a federal offense with serious repercussions. Those found guilty may face:

• Substantial fines
• License suspension or revocation
• Exclusion from federal healthcare programs
• Federal prison time

Lesser healthcare insurance fraud schemes can also be investigated and charged by the state.

These cases are often investigated by government agencies such as the FBI, the Department of Health and Human Services (HHS), and the Office of Inspector General (OIG). If the case involves a private insurance company, the insurance company will often have its own internal investigators who flag the issue, and later hand the case over to law enforcement. Even a suspicion of fraud can lead to audits, investigations, and costly legal battles.

Healthcare providers caught up in healthcare fraud investigations can also face repercussions with their licensing. The licensing board may revoke or suspend a license, or require a hearing, when a healthcare provider is accused of healthcare fraud. Additionally, some healthcare providers will lose the ability to bill certain types of insurance programs going forward.

How to Stay Compliant in the Healthcare Industry

If you work in the healthcare sector, staying informed and compliant is not optional, it’s essential. Make sure to:

• Understand billing guidelines thoroughly
• Keep detailed, accurate patient records
• Avoid shortcuts in documentation or coding
• Establish clear internal policies and regular staff training to ensure staff fully understands complex billing codes and rules

These steps not only help avoid unintentional violations but also protect your reputation and your career.

Why Awareness Matters in Healthcare Compliance

Healthcare fraud is more than just a buzzword, it’s a high-risk issue with real-world consequences. So the next time someone asks, “what is healthcare fraud?”, you’ll know it’s about intentional deception for financial gain, and it can involve anyone in the healthcare system. Staying informed is the best defense.