Connecticut Better Business explains methods used to perpetrate health insurance fraud

Published: 2009-06-30 14:07:03
Author: Connecticut BBB | June 11, 2009

Jun 11, 2009 – As baby boomers enter their silver years, they are becoming targets of sophisticated medical insurance fraud.

Connecticut Better Bureau President, Paulette Scarpetti, says victims are easy prey for fraudsters.

“Consumer education can help people in need of medical attention protect themselves from these crimes. Medical insurance fraud doesn’t only contribute to skyrocketing insurance premiums, but they can also compromise patients’ health.”

The Federal Bureau of Investigation (FBI) has issued an alert about the top four most common types of health Insurance frauds: Medical Equipment Fraud, “Rolling Lab” Schemes, Services not performed and Medicare fraud.

Medical Equipment Fraud:
Individuals are offered “free products” from equipment manufacturers.  Insurers are charged for products that were not needed and/or may not have been delivered.

“Rolling Lab” Schemes:
Unnecessary and sometimes fake tests are administered at health clubs, retirement homes or shopping malls and billed to insurance companies or Medicare.

Services Not Performed:
Customers or health care providers bill insurers for services never rendered by changing bills or submitting fake ones.

Medicare Fraud:
Medicare fraud can take the form of any of the schemes described above, and seniors are frequent targets of Medicare schemes, especially by medical device manufacturers who sell medical equipment and offer seniors free medical products in exchange for their Medicare numbers.  

The fraudsters will either forge a physician’s signature or bribe an MD for merchandise or a service, and then bill Medicare for medical devices that were neither needed nor ordered.

Estimates by government and law enforcement agencies place the loss due to health care fraud as high as 10 percent of our nation’s annual health care expenditure—
or a staggering $226 billion—each year.

Other types of healthcare fraud target the patients with Medical Identity Theft: using a person’s name or other identifying information without that person’s knowledge or consent, to obtain medical services or goods, or to submit false insurance claims for payment.

Medical identity theft frequently results in erroneous information being added to a person’s medical record, or even the creation of an entirely fictitious medical record in the victim’s name.

Methods used to carry out healthcare fraud include:

•Misrepresenting non-covered treatments as medically necessary covered treatments for purposes of obtaining insurance payments—widely seen in cosmetic-surgery schemes, in which non-covered cosmetic procedures such as "nose jobs” are billed to patients' insurers as deviated-septum repairs.

•Falsifying a patient’s diagnosis to justify tests, surgeries or other procedures that aren’t medically necessary.

•Billing a patient more than the co-pay amount for services that were prepaid or paid in full by the benefit plan under the terms of a managed care contract.

•Connecticut Better Business Bureau offers the following advice to prevent consumers from becoming targets of healthcare fraud:

•Protect your health insurance ID card like you would a credit card. In the wrong hands, a health insurance card is a license to steal. Don’t give out policy numbers to door-to-door salespeople, telephone solicitors or over the Internet. Be careful about disclosing your insurance information and if you lose your insurance ID card, report it to your insurance company immediately.

•Report fraud. Call your insurance company immediately if you suspect you may be a victim of health insurance fraud. Many insurers now offer the opportunity to report suspected fraud online through their Website.

•Be informed about the health care services you receive, keep good records of your medical care, and closely review all medical bills you receive.

•Never sign blank insurance claim forms.

•Never give blanket authorization to a medical provider to bill for services rendered.

•Ask your medical providers what they will charge and what you will be expected to pay out-of-pocket.

•Do not do business with door-to-door or telephone salespeople who tell you that services of medical equipment are free.

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