What Is Health Care Fraud, Waste and Abuse?
Fraud is defined as an intentional deception, false statement or misrepresentation
made by a person with the knowledge that the deception could result in unauthorized
benefit to oneself or another person. It includes any act that constitutes fraud
under applicable federal or state law.
Abuse is defined as practices that are inconsistent with professional standards
of care; medical necessity; or sound fiscal, business or medical practices. 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.
Waste is defined as failure to control costs or regulate payments associated with
federal program monies.
How Does Fraud, Waste and Abuse Affect You?
Fraud, waste and abuse affects you by paying higher copayments and premiums. This
means more money out of your pocket. Fraud can also impact the quality of care you
receive and falsify your medical history. Fraud can also deprive you of some of
your health benefits.
Studies show that over 30 billion dollars a year is lost to health care fraud in
the United States. In order to control costs, insurance companies have found it
necessary to investigate fraud for the benefit of its members.
Who Commits Fraud?
Fraud can be committed by members, providers and employers.
Examples of Member 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 spouse
or dependent information, to obtain coverage; concealing information about past
medical history/preexisting conditions; 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 rendered.
- Providing services that are not medically necessary for the purpose of maximizing
- “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 copays or deductibles.
- Accepting kickbacks for member referrals.
How We Are Fighting Fraud
Essence fights fraud and helps protect the monies our members spend on health care
through a dedicated department called the Special Investigations Unit (SIU). The
SIU uses the latest fraud-detection software, fraud hot lines, audits, data analysis
and other tools to identify and investigate improper, deceptive and fraudulent billing.
Essence Healthcare employees are trained in how to identify fraud and abuse and
how to refer these to the SIU.
SIU staff perform in-house and on-site audits. These audits verify medical necessity
and appropriateness of services, proper billing, eligibility for coverage and more.
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.
Call our toll-free hotline 1-800-450-0068 - This hotline makes
it easy for anyone to report suspected fraud and abuse. This number is available
24 hours a day 7 days a week. You may leave your name and number or choose to remain
In writing – Essence Healthcare, Inc. ATTN: Compliance SIU Dept.
13900 Riverport Drive, Maryland Heights, Missouri 63043
Via email – email@example.com
All reports are investigated and involve the appropriate federal and state agencies
You Can Help Fight Fraud, Too!
One way you can help fight fraud is to look over your Explanations of Benefits (EOBs)
when you receive it in the mail. The EOB is your notification that Essence received
a bill for services performed under your benefit plan. 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 to our toll-free hot
line: 1-800-450-0068. This number is available 24 hours a day 7
days a week. All calls and information received are handled confidentially.
Did you know identify theft leads to higher health care costs?
How can I help reduce Medicare fraud, waste and abuse?