One of the most gnawing concerns plaguing the healthcare insurance industry is insurance abuse. According to the Iowa Insurance Division health insurance abuse occurs when false information for e.g. a bogus claim is delivered to the health insurance company to receive payout which is undeserved.
Insurance fraud or abuse is of two types intentional and unintentional. Intentional insurance abuse occurs when people generally want to gain financially by charging for too many services, up-coding their claims, sending too many bills or altering medical records to support their claims. Hospitals and physicians are often not to be blamed for unintentional health insurance abuse. For example; a physician will request frequent lab tests for patients, simple procedures may be elaborated to benefit the billing.
According to the National Healthcare Anti-Fraud Association, the healthcare industry loses about 3% of its total expenditure which amounts up to $51 billion due to insurance abuse. Other estimates show that the industry loses $115 billion annually. Most of the healthcare insurance abuses are violated by unscrupulous healthcare providers who want financial gain. These are a blow to the reputation of other honest physicians who are committed to serving the society rather than engage in these offensive exercises. Some of the most common types of healthcare insurance frauds prevalent in our society are given below:
1) Billing for services and procedures that were never provided.
2) Sometimes doctors assign a different CPT code for an expanded check up rather than the actual code since the other code will bring them more money than the actual code. This is practice is better known as up-coding.
3) Performing medically unnecessary services like unnecessary tests to make a diagnosis.
4) To receive more compensation by miscoding or misinterpreting a procedure.
5) Billing each step of a procedure to present them as independent procedures. This is also known as ‘unbundling’. “Unbundling occurs when multiple procedure codes are billed for a group of procedures that are covered by a single comprehensive code. Two types of practices lead to unbundling. The first one is unintentional and results from a misunderstanding of coding. The second is intentional and is used by providers to manipulate coding to in order to maximize payment…”
Health insurance companies and even government run programs like Medicare and Medicaid incur heavy losses, i.e. billions of dollars in additional costs due to insurance abuse. The U.S. General Accounting office states that more than 10% of the annual healthcare expenditure is devoured by insurance abuse. To compensate the loss, health insurance companies raise premiums on other patients.
Laws against Health Insurance Abuse
In 1996, the Health Insurance Portability and Accountability Act established health insurance abuse as a federal criminal offence where the accused will be sentenced for a federal prison term of up to 10 years as well as other financial penalties. [United States Code, Title 18, Section 1347.] It is also given that if a patient happens to be injured due to the perpetrator’s fraud, then the prison sentence can increase to 20 years and again if the patient dies due to the same then the perpetrator can get a lifer in the federal prison.
Audit Agencies
Audit agencies help in the detection and elimination of fraud cases by conducting complete audits of the operations of the health care providers. They identify problems and are adept to trace fraud and abuse. They then overcome such vulnerabilities through secure information that is gathered for the purpose of law enforcement and educate patients with the sole aim of preventing abuse and fraud.
Consequences
In case a practitioner is found to have committed insurance abuse, there are various implications that the law can apply against the practice. The worst being the provider could loose his license and be imprisoned for a long term.
Healthcare insurance abuse can affect everyone. The creation of false medical records can especially have disastrous effects on the provider’s practice. Claims which are falsely billed by unscrupulous persons can cause honest employees to lose their jobs or they are considered ineligible for other significant positions.
Solution
The government is trying its best to curb health insurance abuse but it is also the duty of the patients as well as the provider to submit correct medical information. Vigilance, being equipped with the right information and willingness is all that it takes to make a difference. With the government looking to freeze the reimbursement rates for 2012 & 2013, physician incomes are under pressure from managed care contracting.
Insurance abuse is increasingly gaining favors as a way to recover lost income. But physicians must realize fraud is not the way ahead as the audit agencies have their own ways to detect Insurance Abuse and with the amount of awareness amongst patients also impedes Insurance abuse
