Fraudulent activity in healthcare is generally related to insurance, billing, or treatment.

Insurance fraud occurs when a company or a person cheats an insurance company or state healthcare program. The exact methods can vary since scammers are always inventing new tricks to undermine the law.

In this particular article, we will delve deeper into medical fraud, explore real-life cases, and identify protective measures that can be used to fight and prevent against this type of fraudulent activity.

Medicare fraud

There are many different forms of Medicare fraud, all of which have the same target — to illegally obtain funds from the Medicare program.

According to researchers, the total Medicare fund reached $500 billion dollars ten years ago, which is projected be doubled in 2020.

Types of Medicare Fraud

• Billing for services not provided. This can involve forging the signature of those enrolled in Medicare or the use of bribes to corrupt medical professionals.
• Upcoding of services and items. Billing Medicare programs for services that are more expensive than the actual service provided. The same type of fraud can occur with medical equipment. A scammer substitutes an item on the bill for a cheaper alternative.
• Duplicate claim. Scammer may change some aspects of the bill like the date or procedure names in an attempt to be paid again for the same case.
• Unbundling. Another method of committing fraud is to split a single service into multiple procedures in the hopes of manipulating the medical compensation system into paying more.
• Excessive or unnecessary services. This type of fraud happens when an excessive amount of services or equipment are billed compared to what is necessary for the patient. For example, fraudsters may file for special care that isn't required, such as full-body tomography billed for a patient with an injured knee.
• Kickbacks. Rewards such as cash, jewelry, free vacations, corporate-sponsored retreats, or other gifts may be used to entice medical professionals into using a particular brand, service, or item. This type of fraud can also impact pharmacists who are given incentives in exchange for dispensing certain brands of medications.

Largest medical fraud case

One of most recent and shocking cases of medical fraud happened to be the largest Medicare fraud case in modern U.S. history.

In 2019, the owner of more than 20 assisted living facilities and skilled nursing homes was discovered to be the leader of a team of fraudsters that had been operating for ten years without detection.

Their scheme was simple. Kickbacks where paid to physicians and hospitals to refer patients to the facilities owned and controlled by the owner, who would in turn bill Medicare for fabricated procedures.

Another technique the group used was to move patients in and out of facilities when the patients reached the maximum number of days allowed by legislation.

The facilities falsified documents stating that the patient underwent treatment.

In 2019, the owner was convicted of numerous charges with sentences that added up to 250 years in prison.

Solutions to stop medical fraud

Countries around the world employ a variety of strategies to detect and prevent medical fraud.

Damages from fraud can be recovered by law and rewards are often offered to individuals for being “whistleblowers."

In 2010, whistleblowers were paid a total of more than $300 million for their active part in bringing cases of medical fraud to light.

Strategies for detecting fraud should be strengthened by technology to ensuring that preventive measures are able to adapt to emerging threats.

Utilizing analytical software with artificial intelligence and inbuilt algorithms can empower organizations to protect themselves against intentional and unintentional fraud by quickly identifying instances of suspicious activity.

Helping businesses protect their budgets and build their reputations as upstanding, corruption-free companies is a top priority for Evinent Analytics, a leading provider of intelligent anti-fraud solutions.