Ileana Hernandez of Manatt Talks About Common Healthcare Fraud Schemes You Should Know About

Healthcare fraud is still a massive problem in the United States, and it shows very little signs of slowing down. Many people in healthcare will take advantage of patients and insurance companies if they can, and when people find out about the fraud schemes they feel cheated. This is why it’s essential to make sure you know all about the types of healthcare fraud that exist and that you stay on top of them.

Ileana Hernandez of Manatt recently talked to us about common healthcare fraud schemes that people should be familiar with.

Here’s some of what she had to say:

What Does Health Care Fraud Cost the U.S.?

According to statistics, health care fraud costs us approximately $60 billion a year. In addition, it is estimated that 10% of all health care services are fraudulent. This means about $6 billion worth of stolen money is taken from insurance companies and public health care systems each year.

One of the ways healthcare fraud is committed involves billing for unnecessary procedures, such as selling an ankle brace that doesn’t work or even a shoddy surgery that never happened. Recovery rooms also bill insurers for patients who don’t need to be there after surgery, and home health agencies overbill for visits that do not exist or are unnecessary.

Other types of fraud include kickbacks, upcoding (billing for a more serious level of services than what was provided), billing for non-covered procedures/services, unbundling (billing for each item rather than the package deal), and phantom billing (having someone else do the billing for you).

What are Some of the Big “Cost Drivers” in Health Care?

According to Hernandez, there are typically many cost drivers in the health care industry that drive up costs, and often fraud is the main factor. Some examples of these cost drivers include:

  • Productivity pressures (companies trying to maximize revenue from employees without cutting back on services)
  • Inappropriate utilization (billing insurance companies for more expensive tests/services than are necessary)
  • Unbundling (billing for each item rather than the package deal)
  • Overutilization of services (more patients being admitted into the hospital, with most often no valid reason)

How is Health Care Fraud Abroad Different from U.S. Fraud?

According to Hernandez, health care fraud abroad is typically linked to public health systems. In addition, fraud schemes abroad are sometimes identical to those in the U.S., but different schemes occur outside the United States.

Some of the most common schemes abroad include:

  • Billing for services not performed (upcoding)
  • Kickbacks to physicians and providers, which can be in cash or even pharmaceuticals
  • Phantom billing (billing through third-party intermediaries who then charge a cut to doctors or providers)
  • Overutilization of diagnostic tests that are reimbursed at a high rate
  • Inappropriate utilization of services (utilizing surgery centers for outpatient surgery, for example)

What Can We Do to Stop the Fraud?

We can become more educated on common types of fraud schemes and how they work. This will help us identify them when we see them and allow us to protect ourselves better. We should also monitor our insurance claims carefully, speak to doctors and providers about why certain treatments or procedures are being recommended, look at all of the services/tests being performed on us before we have surgery, and demand transparency from hospitals and health care systems.

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