Huge Losses To Insurance Companies Due To Cases Of Healthcare Fraud

The loss to insurance companies through healthcare fraud is growing every day. Interesting cases of fraud keep cropping up now and then. Estimates put this loss at between $60 and $600 billion annually. There is universal consensus on one thing – it has to be stopped. Here is a look at the various instances of fraud and the amount of money the insurance providers are lost. 

Fraud using non-existent patients

One of the well-used methods for criminals is to compile a list of names of patients and then create a fictitious doctor who then gets a vendor identification number. All the medical insurers including Medicaid and Medicare gets bills from this doctor for the services rendered to the patients in his list. Of course, the patients don’t even know the name of the doctor let alone know that he exists. The insurers in a bid to save money wire the money into the account of the fictitious doctor. This is one of the top healthcare frauds prevalent in the country. 

Fraudulent treatment for patients

Then, there is the ‘rent-a-patient’ trick used by fraudsters. Here the fraudsters find patients who are ready to get treatment they do not need. Instead, they are ready to undergo cosmetic surgery or take money. The FBI recently uncovered one such case where many thousands of people arrived in California to get unneeded health care. These treatments included colonoscopy and surgery to rectify sweaty palms. The doctors who provided the services charged insurers with a sum of about $1 billion.

This is a vicious circle that begins with the human factor. People, who undergo medical care even when they don’t need it, have to face the risk and unpleasantness of the medical treatment. The cost involved translates into higher insurance premiums because the insurers want to make back the money they lost. This makes the government raise taxes to fund the Medicaid and Medicare services it provides but is now suffering due to fraudulent claims. 

Fraud and risk detection software

All risks and fraud are now easy to detect and prevent through the services provided by companies like digitalharbor, the first providers of fraud and risk detection software in the country. They are the pioneers who brought programs such as Know Your Customer and Know Your Provider to the banks. Let us see another case of fraud, this time involving HIV patients.

Two physicians from Miami-Dade are facing prison terms for prescribing obsolete infusion drugs to HIV patients. This involved Medicare and the sum involved was $19.5 million. Another two doctors prescribed drugs and charge the healthcare providers but they never administered the drugs. A bizarre incident involving Medicare came to light where a supplier of medical equipment Rinaldo Guerra submitted Medicare claims to the tune of $123 million to supply artificial limbs to dead patients. Guerra had 11 companies that supply medical equipment.

Now that there is strict governance and better control measures possible, the losses have begun to come down. Companies like Digital Harbor has given us better means for detecting and preventing fraud and along with handling the risk associated with providing the insurance.

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