What is Healthcare 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 co-payments 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 Can Commit 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 or 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 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 hot lines, 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 fraud and abuse and how to refer these to the SIU.
Investigate – 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.
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.
Report – Our toll-free hotline (1-800-450-0068) – 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 anonymous.
In writing – Essence Healthcare ATTN: Compliance SIU Dept. 13900 Riverport Dr., Maryland Heights, MO 63043
Via email – firstname.lastname@example.org
All reports are investigated and involve the appropriate federal and state agencies when necessary.
How You Can Help
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 Healthcare 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.