Types of Healthcare Frauds – How to Spot Them
There are many different types of frauds that occur in the healthcare industry. The most common types of fraud are Medicare/Medicaid fraud, unbundling/upcoding and kickbacks/bribes.
Medicare / Medicaid Fraud
Medicare and Medicaid fraud are two of the most common forms of healthcare fraud and appear in many forms. In most cases, Medicare and Medicaid fraud arise from fraudulent billing schemes, improper marketing tactics, or the offering of kickbacks or bribes to beneficiaries. Many times, Medicare and Medicaid fraud appear when providers try to take advantage of older beneficiaries. This can also appear as submitting bills for services not medically necessary or medical equipment that is not needed.
Unbundling / Upcoding
Unbundling and upcoding are common forms of healthcare fraud in which medical providers seek more funds than they are entitled to. Federal and state programs such as Medicare and Medicaid have set forth billing codes for healthcare providers to use. Specific codes are used for medical services and devices and determine the amount of reimbursement the government owes the provider. Upcoding and unbundling occurs when medical providers use fraudulent codes that result in greater reimbursement funds from the government.
Kickbacks are a common form of healthcare corruption and come in many forms. Kickbacks can be bribes paid to public officials, gifts sent to certain parties that interfere with unbiased business decisions, and more. Kickbacks made to foreign officials are a direct violation of the Foreign Corrupt Practices Act (FCPA).
Kickbacks can often result in poor quality services, overutilization, and increased costs. In one case, Swiss-based pharmaceutical company Novartis paid over $300 million in fines and penalties to the Department of Justice (DOJ) and Securities and Exchange Commission (SEC) for violating the Foreign Corrupt Practices Act.