What Is Health Care Fraud, Waste and Abuse?
“Fraud” is an intentional deception or misrepresentation made with the knowledge that the deception
could result in unauthorized benefit to oneself or another person. Health care fraud involves the use
of the health care system in a deceitful manner in order to profit from it.
“Waste” is failure to control costs or regulate payments associated with federal program monies.
“Abuse” is provider practices that are inconsistent with professional standards of care, medical necessity, or sound fiscal, business, or medical practices,
resulting in unnecessary cost to the Medicare program, or in reimbursement for services not medically necessary.
"Intent" is the key distinction between Fraud and Abuse. An allegation of waste and abuse can escalate into a fraud investigation if a pattern of intent is determined.
How Does Fraud, Waste and Abuse Affect You?
Fraud, waste and abuse diverts significant resources away from necessary health care services,
which results in paying higher co-payments and premiums, and other costs. Fraud can also impact
the quality of care you receive and even deprive you of some of your health benefits.
Studies show that billions of dollars are lost each year to health care fraud in the United States.
Laws are in place to prevent health care fraud and abuse, and to punish those who commit this crime.
Insurance companies such as Essence also investigate and try to prevent fraud.
Who Commits Fraud?
There are many types of health care fraud, which can be committed by individuals, medical providers, employers, and others. The primary goal of fraud is to profit financially, or to obtain medical care without valid insurance.
Examples of Individual Fraud
- Using someone else’s ID card or loaning your ID card to someone not entitled to use it.
- Providing false statements on an enrollment application, such as adding spouse or dependent information to obtain coverage, or concealing information about past medical history/ preexisting conditions.
- Visiting different doctors to obtain multiple prescriptions.
- Exaggerating a claim.
- Providing false information in order to receive medical coverage or services.
- Failing to report other insurance, or to disclose claims that were a result of a work related injury.
Examples of Provider Fraud
- Billing for services that were not provided to the patient.
- Providing services that are not medically necessary for the purpose of maximizing reimbursement.
- “Upcoding” – billing for a more costly service than was actually provided.
- “Unbundling” – billing each step of a test or procedure as if it were separate instead of billing the test or procedure as a whole.
- Submitting claims with false diagnoses to justify tests, surgeries or other procedures that are not medically necessary.
- Waiving member co-pays or deductibles.
- Accepting kickbacks for member referrals.
How We Are Fighting Fraud
Essence Healthcare fights fraud and helps protect the monies our members spend on healthcare through a dedicated
department called the Special Investigations Unit (SIU). The SIU uses the latest fraud-detection software,
fraud hotlines, audits, data analysis and other tools to identify and investigate improper, deceptive,
and fraudulent billing.
Identify – Essence Healthcare employees are trained in how to identify possible fraud and abuse and will refer these issues to the SIU for investigation.
Detect – SIU staff perform investigations and conduct activities to verify medical necessity, appropriateness of services, proper billing, eligibility for coverage, and more.
Prevent – Claim management tools assist with the identification of inconsistent and illogical relationships among claims data. State of the art data mining tools are used to identify providers and members who may be involved in fraud.
How You Can Help
- Ask your doctor questions and make sure you know and understand the procedures and services performed.
- Be cautious when using websites – do not enter personal information such as Social Security number, Medicare number, credit card number, etc. unless you are sure it’s secure.
- Refuse to accept any packages received from an unknown pharmacy or other source.
- Review your Explanation of Benefits (EOB) when you receive it in the mail. Check to be sure you received the services listed. Are the dates correct? Are there charges that seem wrong to you?
- Report any suspicious activity or questionable services:
Call our toll-free Compliance & Ethics Hotline at 1-800-450-0068. This number is available 24 hours a day 7 days a week. You may leave your name and number or choose to remain anonymous.
In writing – Essence Healthcare, ATTN: Compliance SIU Dept., 13900 Riverport Dr., Maryland Heights, MO 63043
Via email to email@example.com
All reports are investigated and involve the appropriate federal and state agencies when necessary.