Health insurance fraud is a serious problem for insurance providers and the greater health industry in general, amounting to "tens of billions of dollars" in losses every year. As discussed in our recently released Cost of International Health Insurance - 2017 report, healthcare fraud plays a significant role in driving up the cost of healthcare, and also leads to a subsequent rise in health insurance premiums. Here, we look at health insurance fraud and what can be done to minimize its impact.
What is health insurance fraud?
Medical insurance fraud can be defined as " false or misleading information [that] is provided to a health insurance company in an attempt to have them pay unauthorized benefits to the policyholder‚ another party‚ or the entity providing services. "
Simply put, insurance fraud is the act of misrepresenting facts or outright lying to make money from the health insurance system; potential offenders can be anyone - patients, doctors, hospitals, or even pharmacists. Popular examples of health insurance fraud include falsifying claims, misrepresenting the provider of service, and billing a non-covered service as a covered service.
There's also abuse, which involves practices that are not deemed medically necessarily, or are outside acceptable standards of professional conduct, thus leading to unnecessary costs being paid (e.g. over-prescribing medications, ordering unnecessary tests, keeping patients at the hospital for longer than necessary).
The impact of health insurance fraud
There are many ways in which health insurance fraud can have an impact on employers and employees, including:
- Increased health insurance premiums: Continuing challenges related to fraud is one of the main drivers behind increasing health insurance premiums. As premiums continue to increase, health insurance will quickly become unaffordable for both employers and individuals.
- Cutbacks on benefits: As premiums become more costly, it is more likely that there will be cutbacks on the benefits included in employer-provided health insurance policies (e.g. the removal of dental cover, limits on who is covered, etc.
- Increased copayments and deductibles: Copayments and deductibles are on the increase, as employees find themselves footing the bill for a higher proportion of their healthcare costs despite having insurance.
What can my company do to tackle fraud?
One of the most effective ways an employer can tackle health insurance fraud and abuse is by educating their employees. Employees should be aware of:
- What is and isn't covered by their group plan
- What constitutes health insurance fraud and abuse
- How fraud impacts employees and their benefits
- How to spot fraud and abuse
Below is a checklist of what employees should keep their eyes on to protect themselves, their company, and the healthcare system at large from insurance fraud and abuse, and keep healthcare costs down for everyone:
- Report any lost or stolen health insurance cards immediately
- Fill out, sign and date one claim form at a time. Never sign empty or incomplete forms.
- Always confirm the diagnosis and make sure it correlates with the information on the form
- Question free offers (e.g. free tests, screenings, and treatments), especially when the healthcare provider asks for your insurance information
- Know what's covered and what is not covered by your health insurance
- Alert the insurer of any suspected fraud or abuse
Partner with Pacific Prime today
By partnering with an insurance specialist like Pacific Prime, you'll find that we not only help you source the most optimal group health insurance plan, but also answer any questions your employees may have regarding their benefits, or how to spot fraud. To learn more, contact our helpful advisors today, or check out our brand new corporate site.