The U.S. spends an estimated $2 trillion annually on health care. And according to the National Health Care Anti-Fraud Association, at least 3percent of that spending - about $70 billion - is lost to fraud each year.
While the majority of individuals and health care providers are honest, the small number who aren't add up to big dollars in terms of the impact on us all.
What constitutes insurance fraud? It's defined as providing false information to an insurance company with the intent of gaining payment or something of value, like medical services or prescription drugs.
At the individual level, for example, fraud occurs when a person gives their insurance card to someone else to get care, or when benefits are used to pay for prescriptions not prescribed by a doctor.
At the provider level, fraud can take many forms, including billing for services never rendered, charging for more expensive services than those provided, purposefully misdiagnosing, or receiving kickbacks for patient referrals.
In Pennsylvania, insurance fraud is classified among the most serous of crimes as a felony. Those who are convicted face prison time, fines, legal fees and more, not to mention the personal and professional consequences.
Yet amazingly, almost one in four Americans say it's OK to defraud insurers, according to a 2003 survey by the consulting firm Accenture Ltd.
Here are some of the ways fraud affects those of us who play by the rules:
- Money that was paid to those who shouldn't have received it drive up health insurance premiums for us all.
- To compensate for the costs of Medicaid fraud, states like Pennsylvania must either decrease services or raise taxes for us all.
- Prescription drug fraud may result in stricter policies and regulations that affect the availability of medications for us all.
- Individuals who fraudulently use the health care system are taking medical resources away from those who truly need them.
As a leader in the health insurance industry, Blue Cross of Northeastern Pennsylvania (BCNEPA) spends considerable resources on finding and fighting fraud in an effort to keep premiums down, including employing a special unit to review claims for fraudulent activities. And as a member company of the national Blue Cross Blue Shield Associa-tion, we share information frequently with fraud investigators at other member companies to stay abreast of the latest schemes and trends.
The payoff is big for health care defrauders. In 2008, statistics showed that an individual incident of health care fraud netted an average of $19,000 - four times the amount of an individual act of overall identity theft.
What can you do to protect yourself and others? Here are some tips:
- Understand your care and the tests that are being ordered for you.
- Ask your providers what they will charge and what you will be expected to pay out-of-pocket.
- Read your Explanation of Benefits (EOB) statement carefully to be sure that the services you are charged for are the ones you received. Call your insurer and provider if you have questions.
- Never give blanket authorization to a medical provider to bill for services rendered.
- Do not do business with door-to-door or telephone salespeople who tell you that services or medical equipment are free.
- Give your insurance identification only to those who have provided you with medical services.
- Keep accurate records of all your health care appointments.
- If you think an incidence of fraud has occurred, report it to your insurer right away.
The costs of insurance fraud affect us all. Fighting fraud is critical to preserving the well being of every individual and the health of our economy.
Do what you can to help.
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Kerry Turner is the vice president of Corporate Assurance and Compliance at Blue Cross of Northeastern Pennsylvania.