The Hunt for Medical Provider Fraud

Fraud in any industry has a domino effect on a number of people, businesses, organizations and more.
As all too many in the workers compensation industry know, fraud is an on-going problem that has not only monetary fallout issues, but also changes lives forever.
According to the Iowa Fraud Bureau, health insurance fraud nationwide costs Americans approximately $80 billion yearly, which is close to $950 for each family.
With those figures in mind, is it safe to say that medical provider fraud is running rampant nationwide, a problem that the majority are taking part in? Of course the answer to that would be no.
When it comes right down to it, the vast number of doctors, hospitals, pharmacists, and others providing medical services are in fact honest people that follow the necessary rules and regulations to make sure everything is within the law.




What Types of Fraud Are Most Prevalent?
While authorities and honest medical providers and workers for that matter can do their best to prevent fraud, it is still happening at an alarming rate.
Keep in mind that a vast majority of medical provider fraud cases begin with legitimate injuries, injuries that are then essentially “milked” to allow one to get more than they are truly entitled to.



With that in mind, what are some of the more common medical provider fraud issues? Five of them are:


  1. Upcoding – This is where someone submits a claim towards a service that proves more severe than the actual/original service provided. In such an instance, a claim could be turned in for a broken finger when in fact that patient only obtained treatment for a sprained or bruised finger from a workplace injury;
  2. Phantom billing – In these instances, bills are sent for services that were in fact not performed;
  3. Exaggerated hospital expenses – In this case, there are charges that are way over top what would normally be charged for items like medication for starters;
  4. Self-referral – This is where a provider ends up referring themselves or a partner provider to oversee a service. In many instances, the shady goal here is for financial incentive;
  5. Repeated billing – In this scenario, billing is incurred twice for the same procedure, medications or necessary supplies. Much like someone padding their mileage, they are being compensated more than they deserve.



Medical Provider Fraud Signs
In order to lessen the chances of medical provider fraud, all eyes and ears must be on alert to any discrepancies that appear either on paperwork or are caught during discussions or visits with medical personnel.
One of the goals of the individual or individuals committing such fraud is to keep the number of people involved to a minimum. Just like the old saying “loose lips sink ships” goes; it just takes one person to say something either accidentally or on purpose to kill a fraud scheme.
In order to be most vigilant against medical provider fraud, look for any inconsistencies in both statements and actions. If something seems amiss, by all means check out.
Remember, not doing so can lead to financial hardship and other problems.
If you have come across medical provider fraud, what were the initial signs that something was wrong? Also, did you suffer financial setbacks as a result of the fraud?





Author Michael B. Stack, CPA, Principal, Amaxx Risk Solutions, Inc. is an expert in employer communication systems and part of the Amaxx team helping companies reduce their workers compensation costs by 20% to 50%. He is a writer, speaker, and website publisher.  Contact:


©2014 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law.





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