How is Healthcare Fraud Different from Healthcare Abuse?

Healthcare abuse is acting outside of the acceptable professional standards of conduct or what is medically necessary. Healthcare fraud involves deliberately misleading or falsifying documents or any other dishonest conduct in order to receive more from an insurance payment than entitled to.

Fraudulent claims continue to be one of the biggest problems in the health insurance industry and can lead to enormous losses. In fact, the healthcare system has spent tons of money on AI and other technologies to try to combat fraudulent claims.

What are the differences between healthcare fraud and healthcare abuse?

Both healthcare fraud and healthcare abuse are illegal and involve taking advantage of the healthcare system. They have a lot of cross-over yet each is very distinct. Healthcare fraud and healthcare abuse can be committed by:

• Patients
• Doctors
• Other medical specialists
• Pharmacists
• Office personnel

Healthcare abuse could come in the form of an employee taking advantage of their position by filing a pattern of claims for services that were not medically necessary, for example. Or it could be improper billing practices at a hospital, clinic, or among certain employees. A failure to maintain accurate medical and financial records are other forms of healthcare abuse.

Healthcare fraud is more than misrepresenting facts, although that’s part of it. Healthcare fraud is about taking money away from taxpayers to line the pockets of fraudsters. Health care fraud is a felony under the False Claims Act. Investigations into fraud can include multiple agencies and departments including:

• The FBI
• S. Department of Health and Human Services
• State and local police
• Large insurance companies

Examples of healthcare fraud include:

• Billing for services that were never provided, also known as phantom billing for tests never performed, treatments never given, supplies not provided, or services never rendered
• Overbilling for services, such as charging twice for a treatment that was done once
• Upcoding, which is when a worker or organization alters diagnosis or treatment codes to justify a higher payment
• Ordering or providing excessive and unnecessary tests or services

What are the consequences of a healthcare fraud conviction?

Some violations can be extremely hefty. For example, there is a $10,000 penalty per HIPAA violation due to willful neglect, with an annual maximum of $250,000 for repeat violations, but only if the violation is corrected in the required time frame. If not, then the penalty can be as high as $50,000 per violation with an annual maximum of $1.5 million.

According to the Health Insurance Portability and Accountability Act, healthcare organizations, insurance companies, and hospitals need to have established policies and procedures for maintaining the privacy and security of confidential health information that includes a description of what the different types of offenses are and what the penalties are.

What is qui tam litigation?

Lawyers use a lot of Latin phrases. “Qui tam pro domino rege quam pro se ipso in hac parte sequitur,” roughly translates to “he who brings an action for the king as well as for himself.” If you have witnessed fraud or abuse and want to report it, then you will need to speak with a Medicare fraud attorney who protects the rights of whistleblowers.

It’s true that medical records can be misplaced, personnel can forget to do something, or other honest mistakes may happen. However, when there is a pattern of fraud, whether it’s over-utilization of services or billing for services with no documentation supporting that services were rendered, then that’s far too much to be coincidental.

In fact, it is sometimes those who work at hospitals or medical facilities who witness and know about the receipt of illegal kickbacks, overbilling, and a false or unnecessary issuance of prescription drugs, among other types of Medicare fraud and abuse. Some of the personal who could be involved in these types of cases include:

• Nursing home administrators
• Doctors
• Benefits administrators
• Medical billing specialist
• Medical coding specialist
• Accountants
• Nurses
• Office assistants

These are the people who may notice that the nursing home, hospital, or healthcare organization that they are working for is receiving supplies that were never purchased, gifts, or payment for services that were never provided to patients they had never seen.