Health Insurance Fraud: A Comprehensive Report and Analysis

This report delves into the pervasive issue of health insurance fraud, examining its various forms, including billing fraud, doctor fraud, patient fraud, and drug fraud. It outlines the detrimental effects of such fraud, such as overburdening healthcare systems, causing physical and lethal harm to patie...Read More

Running head: HEALTH INSURANCE FRAUD
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HEALTH INSURANCE FRAUD
Student’s Name
University Affiliation
Author’s Note

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Health Insurance Fraud
Introduction
Health insurance has always been a victim of issues related to fraud. Fraud in healthcare
has recently been on the rise. Insurance fraud is often overlooked as the simple act of
misinterpreting facts or deliberately receiving insurance payout from dishonest claims. While
healthcare fraud varies, it involves fraudulent claims related to profit. For a business to start up in
healthcare, they have to follow the state and federal laws, which help in curbing fraud (Faseela,
& Thangam, 2015). Additionally, the laws help in monitoring staff and ensuring more
comprehensive compliance by each member. In healthcare insurance, there are different types,
which involve patient, doctor, billing, and drug fraud. This article describes each type of fraud in
a healthcare system, as well as ways they can be avoided.
Billing fraud is the most common practiced fraud in healthcare insurance. In the health
sector, billing fraud continues to be one of the biggest challenges yet to be solved. In most cases,
institutions, which use the paper-based or small setting, exhibit high rates if billing fraud
(Abdallah, Maarof, & Zainal, 2016). However, in large hospitals, there are technological
advancements, which ensure there are minimal fraud cases. First, patients might be wrongly
billed for services, which they are yet to receive. For instance, while a patient might be treated b
a nurse, the bill might be billed using the doctor's rate (Verma, Taneja, & Arora, 2017). Also, the
institution might charge extra costs more than the service provided.
Doctor fraud is also common in a healthcare institution. Today, the cost of healthcare has
dramatically increased due to technological advancements. As such, unethical doctors take
advantage of the situation and overcharge their clients (Faseela, & Thangam, 2015). For
instance, they would increase their revenues claiming the diagnoses were complex. Instead, other

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doctors instigate unnecessary surgeries, which increase the cost of healthcare (Thornton et al.,
2015). This makes an insurance company to carry the baggage of paying for the treatment.
Thirdly, there is patient fraud, also while administering healthcare service. In conjunction
with the medical provider, the patient will perform fraud to extort funds from their insurance
cover (Abdallah, Maarof, & Zainal, 2016). Patients can also defraud insurance companies by
faking sickness as a cover for a friend or relative. Besides, they can lie about their conditions to
get certain benefits.
Lastly, the medical team can involve themselves in drug fraud. Using their positions,
medical caregivers can steal drugs for personal purposes. While this problem is significant n
healthcare, the fraud is secondary theft of drugs (Abdallah, Maarof, & Zainal, 2016). The worker
obtains subsidized drugs from the healthcare organizations and later resells to the black-market
to gain profits.
Mainly, patients and insured individuals are uncomplicated while performing fraud
activities. In most cases, fraud involves undisclosed conditions, which initially existed (Dora &
Sekharan, 2015). Also, by being dishonest about an injury to receive a payout is a form of fraud.
Situations of completely fabricating a case are common to ensure physicians shop multiple
prescriptions, which they use for personal benefits. As such, this exacerbates the challenge of
fraud in the healthcare sector.
The Effects Of Medical Fraud
In the entire world, errors are increasing in the medical sector due to fraud. While those
hidden costs are evident, everyone using the healthcare system bears the consequences. First, the
healthcare system has been overburdened (Kirlidog & Asuk, 2012). Medical practitioners have
taken essential services from those who need them most as a form of over-treating. In the United

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States, for instance, a survey conducted found that 2106 medical practitioners believed that more
than 20 percent of medical care was unnecessary (Dora & Sekharan, 2015). Additionally, the
stated that 22 percent of prescriptions, 25 and 11 percent of tests and procedures, respectively,
were also unnecessary (Dora & Sekharan, 2015). Mainly, fear of malpractice and demands by
patients instigated these high numbers. Recently some physicians stated that they would perform
unnecessary procedures, tests, and treatments just to for-profit purposes.
As a result, there is much crowding in the healthcare systems today. In turn, there are
high numbers of individuals who die due to a lack of treatment from their crucial cases (Faseela,
& Thangam, 2015). Hong Kong holds the highest rate of suicide due to overcrowding of patients.
Around the world, receiving timely treatment has become imperative.
Medical fraud in insurance also leads to physical and lethal harm to patients. Medical
practitioners are faced with making unnecessary treatment, which ends up being fatal for some
patients (Rawte & Anuradha, 2015). Regardless of the person instituting for false tests, whether
the patient or the doctor, overdiagnosis leads to harmful courses of treatments and medications.
In severe cases, patients might die due to overdiagnosis or misdiagnosis.
Lastly, fraud increases health insurance premiums. Accelerated inflation has been caused
by overtreatment and fraud. Governments and private insurers have incurred due to fraud in
healthcare systems and insurances (Kirlidog & Asuk, 2012). Patients receiving public services
suffer due to overburdening and under-resourcing. This means that they are required to pay more
for a small service. Identifying fraud, measuring, and understanding it has been one of the most
significant barriers to maintaining stable premium prices.
Solutions To Fraud In Health Insurance

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First, it is vital to ensure that personal health insurance information is well protected.
When individuals can preserve information about their health insurance, it would be difficult for
medical practitioners to manipulate and extort huge service fees from them (Anbarasi & Dhivya,
2017). Secondly, many insurance companies have stepped towards reducing fraud in the
industry. They have implemented measures in that a patient cannot be treated unless they have a
concurrent critically reviewed report. This report has detailed information about the patient and
their medical condition (Anbarasi & Dhivya, 2017). Also, insurance companies have stepped up
and investigate a patient before allowing their services to be used. This helps ascertain that the
patient tells the truth. Lastly, insurance companies should find ways of ensuring workers are
accountable for the drugs they administer to patients. This will help reduce how medical
practitioner’s misuse their rights in healthcare.
Conclusion
Currently, Health insurance has always been a victim of issues related to fraud. Billing,
doctor, patient, and drug are types of frauds, which implicate with health insurance. Medical
practitioners are the leading perpetrators causing health insurance fraud. As such, while measures
to curb fraud in healthcare insurance are in place, medical practitioners should be highly
counseled on the harm they cause to the economies.

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References
Abdallah, A., Maarof, M. A., & Zainal, A. (2016). Fraud detection system: A survey. Journal of
Network and Computer Applications, 68, 90-113.
Anbarasi, M. S., & Dhivya, S. (2017, February). Fraud detection using outlier predictor in health
insurance data. In 2017 International Conference on Information Communication and
Embedded Systems (ICICES) (pp. 1-6). IEEE.
Dora, P., & Sekharan, G. H. (2015). Healthcare Insurance Fraud Detection Leveraging Big Data
Analytics. IJSR, 4(4), 2073-2076.
Faseela, V. S., & Thangam, P. (2015). A Review on Health Insurance Claim Fraud
Detection. International Journal of Engineering Research Science (IJOER), 1.
Kirlidog, M., & Asuk, C. (2012). A fraud detection approach with data mining in health
insurance. Procedia-Social and Behavioral Sciences, 62, 989-994.
Rawte, V., & Anuradha, G. (2015, January). Fraud detection in health insurance using data
mining techniques. In 2015 International Conference on Communication, Information &
Computing Technology (ICCICT) (pp. 1-5). IEEE.
Thornton, D., Brinkhuis, M., Amrit, C., & Aly, R. (2015). Categorizing and describing the types
of fraud in healthcare. Procedia Computer Science, 64, 713-720.
Verma, A., Taneja, A., & Arora, A. (2017, August). Fraud detection and frequent pattern
matching in insurance claims using data mining techniques. In 2017 Tenth International
Conference on Contemporary Computing (IC3) (pp. 1-7). IEEE.

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