Insurance fraud has existed ever since insurance has been available as a commercial enterprise. Fraudulent claims account for a significant portion of all claims received by insurers, and cost billions of dollars annually. There are many types insurance fraud and occur in all areas of insurance.
Insurance fraud occurs when any act is committed with the intent to fraudulently obtain some benefit or advantage to which they are not otherwise entitled (whether this is a claimant or a provider) or an insurance company knowingly denies some benefit that is due and to which someone is entitled.
Insurance fraud crimes range in severity, from slightly exaggerating claims to deliberately causing accidents or damage. Fraud also affects the lives of innocent people, both directly through accidental or purposeful injury or damage, and indirectly as these crimes cause insurance premiums to be higher. These crimes pose a very significant problem, and governments and other organizations are making efforts to deter such activities.
The conservative annual estimate of health care fraud in the U.S. is $80 billion, with some estimates twice that amount.
In fiscal 2011, $4.1 billion in fraudulent claims was recovered by authorities, according to the departments of Justice and Health and Human Services (HHS).
Still, officials say, the battle against health care fraud is never ending.
Let’s begin by covering possible Health Care provider fraud behaviors.
Spotting The Red Flags!
Below are some behaviors that can indicate fraudulent activity by a health care provider:
- Bill for treatment on consecutive dates of service for minor injuries.
- Work with the same attorney(s) that repeatedly have similar questionable claims.
- Bill for services that did not occur.
- Bill for services that were not received.
- Bill for unnecessary medical equipment.
- Pay an agent or other person for referrals.
- Charge workers for medical treatment on their claims.
Provider offices where you observe…
- Increased injury claims after a business closure.
- Claimants move away but bills are still being sent on their behalf.
- High volumes of prescription drugs not appropriate to the injury.
- Claimants using prescription drugs for uses other than intended (selling, trading for street drugs, or as payment for services).
Interpreters acting as advocates on the claim, steering the injured worker to different clinics, physical therapists, etc.
Now let’s look at some possible claimant fraud behaviors.
Spotting The Red Flags!
Below are some behaviors that can indicate fraudulent activity by a claimant:
- Multiple claims.
- No witnesses.
- Failure to report an injury in a timely or immediate manner.
- Intentional misrepresentation of facts.
- Claimants who are not ambitious about getting back to work.
- Different symptoms for different providers/Moving or changing symptoms of pain.
- Unseen injuries which can’t be proven by diagnostic or medical evidence, i.e. soft tissue injuries.
- Diagnostic tests with differing results.
- Claimants report ambiguous and subjective symptoms.
- Claimants file a WC claim while newly hired or close to retirement.
- Monday and Friday claims should be viewed as suspicious when other red flags are noticed.
- Non-compliance on recommended Dr.’s instructions.
- Requesting an increase or change in pain medications.
- Claimants who avoid speaking with the adjuster.
- Over utilization of services.
Now, not all of these red flags alone indicate fraud but if there are two or more red flags it would be prudent to take a closer look. In the world of insurance claims, we are constantly being presented with something that looks like the genuine article, and thus, our tendency is to assume that it is. A report about injuries and treatment written on a doctor’s letterhead causes us to assume that there was an actual patient, that there was an injury, that there actually was some treatment and there actually was a doctor who was in some way involved with that report. In many cases, everything about a claim is just as much an illusion as Houdini’s old trick of vanishing an elephant. We see photos of banged-up cars, we hear stories of how the accident happened and we see medical reports and bills. And the usual reaction is to accept what we see at its face value.
The trouble with such assumptions is that while the majority of claims are just what they appear to be, the percentage of claims which are “illusions” is much greater than we might initially imagine.
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