What Counts as Health Care Insurance Fraud?

Health insurance fraud is any act committed in order to improperly take advantage of the health insurance process. Individual claimants, health care professionals, and third-party businesses can commit health care fraud.

Health insurance fraud is more common in the American insurance industry than you may think. There are many federal and state laws and regulatory agencies that exist to protect injured parties, whistleblowers, and the insurance companies paying insurance claims. To understand health care fraud laws in your state, talk to a local health care law attorney.

Understanding Health Care Fraud

According to the National Health Care Anti-Fraud Association, the U.S. loses tens of billions of dollars to health care fraud every year. Health care fraud affects everyone, including taxpayers, patients, insurance companies, and health care providers.

Health care fraud involves private insurance companies and government healthcare insurance agencies, including Medicare and Medicaid fraud. There are many types of health care fraud, including:

• Billing insurance for medical procedures that were never provided
• Medical billing for unnecessary services
• Duplicate billing for double reimbursement
• Unbundling (separate billing for bundled services)
• Upcoding (overbilling for higher-rate services)
• Kickbacks for patient referrals or unnecessary prescription drugs
• Self-referrals to service providers where the doctor or a family member has a financial interest
• Misrepresentation of the services rendered
• Someone using another person’s insurance card for health care services

Find top Health Care lawyers easily

Connect with a qualified attorney today.

Find a lawyer today

If You’re Dealing with Repeat Healthcare Fraud Scammers

If you’re dealing with someone who has made insurance fraud a career, you may not have a problem proving your case. The hard part, says Gregory D. Pike, is in trying to collect financial rewards. Pike is an attorney in Walnut Creek, California, who has handled several insurance fraud cases. How they’re resolved depends on several variables—especially the specifics of the case and the type of fraud.

“The typical response we get is, ‘I don’t care; I’ve blown the money,’ or, ‘I’ve secreted the money,’ or, ‘It’s offshore; you’re never going to get it. You’re not going to get a dime out of me. Go get your paper judgment and file it in every county and see if you get anything out of me.’ And my response is, ‘You know how many times I’ve heard that? I hear it in nearly every case. But you’d be amazed where we can find money and how much.'”

Pike commonly looks to the SEC’s annual report for healthcare companies to estimate their assets. “So when they say they don’t have any money, we can come back and say, ‘Yeah, but I know you have that house in Bel Air, doctor, that is worth $3.1 million.'”

Prohibited Self-Referrals, Kickbacks, and Fee-Splitting

For medical practitioners, there are important federal laws and regulations governing healthcare and insurance fraud. The Stark Law governs fraud, abuse, self-referrals, and fee-splitting. Kickbacks are governed separately under the federal Anti-Kickback Statute (AKS).

Medical providers who participate in federal health programs cannot make self-referrals. These laws are notoriously complex, and there are exceptions. Medical practitioners who violate the Stark Law could be subject to serious penalties, including up to a $15,000 fine per offense. Doctors could also face a temporary suspension or permanent ban from participating in government health programs.

If You’re Dealing with Inexperienced Defense Attorneys

In these cases, they may fight you for years and continue piling up the fees.

“I’ve been involved in cases where we’ve sued law firms because laypeople were submitting claims, then getting the money from the insurance company, and then pocketing the money instead of paying out the people who were injured,” says Pike. “The defense in that was, ‘This isn’t insurance fraud because there’s no intrinsic fraud involved in the claim itself’—no staged accidents, no billing for unrendered treatment, no falsified medical records.”

In the end, Pike and his plaintiffs still won. But like many of the cases in the health insurance area, it took a long time. “That case started in 2012 in the investigative stage, and the court of appeal issued its ruling and decision in July 2019. I have one case in Los Angeles County right now that I started working on in 2010.”

If You’re Dealing with Experienced Defense Attorneys

Seasoned defense attorneys know better than to repeatedly drag their client’s name or their company’s name through the headlines. Often, they want to settle.

This probably means it will be a quicker resolution than trials and appeals. It also means you have a bit more control over the outcome. As to what you can expect from a settlement, Pike again says it’s case-specific, but there are usually three components if the healthcare practitioner or healthcare provider entity is still in business.

1. “There’s got to be cash to be involved to make the victim whole.”
2. “There’s got to be either a moratorium on submitting claims—a moratorium for time or a moratorium in perpetuity.”
3. “And then, as it pertains to the claims that have been submitted, we usually negotiate an assignment of the accounts receivable to the insurance company so that they own it.”

If the business has gone out of business or ceased operation, Pike says: “We’ll get a forbearance agreement where Dr. Jones agrees that, in any facility that he has an ownership interest in, he will not submit a claim to the insurance company.”

If You Have a Lot of Investigating To Do

The discovery process is a major hurdle in these cases and contributes to the amount of time and resources that go into each case. So it’s helpful, Pike says, when someone comes through his door, not only with a case but with evidence.

“It could be really helpful in instances where someone was, for example, involved in the bill preparation or the maintenance of the medical records, to come forth saying, ‘None of these bills for these certain procedures are being performed.’ But oftentimes, a lot of what we look at and analyze is the data,” he says.

This allows them to identify systematic fraud, such as consistent overcharges, because another thing these cases have in common is greed.

“If you keep it under the radar and don’t get greedy, you don’t get nailed,” Pike says. “It’s the people that really get involved in the fraud scheme, and then get a taste of the money they’re getting and go, ‘Man, if I bump it up a nickel here, no one is going to know the difference.'”

Find an Experienced Attorney To Combat Fraudulent Claims

You can report Medicare fraud anonymously through the Department of Health and Human Services tip hotline. If you want to collect a reward for blowing the whistle, talk to a healthcare insurance lawyer about your legal options. 

When dealing with false claims, fraud prevention, or risk management, contact a health care insurance attorney experienced in insurance claims fraud.