Fraud, Abuse, and Waste

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Fraud, Abuse, and Waste in the US Healthcare System
Tony Hackman
University of Phoenix
Financial Management in Health Care
Adam Craft
August 01, 2010

Fraud, Abuse, and Waste in the US Healthcare System
Healthcare insurance costs have risen at the average rate of three percent over the inflation rate for the past 10 years. As a result, the government is spending a larger percentage of GDP on healthcare for Americans. One of the reasons for this increase in the overall cost for healthcare is directly related to the increase in fraud, waste, and abuse. It is estimated that the United States spends between 15 and 25 billion dollars annually because of fraud, waste, and abuse (fwa). This paper will examine the types of fwa, the involvement of the federal government in prevention, the roles of healthcare organizations and employees, and the protection for whistle-blowers and consequences for those involved in fwa. FWA (fraud, abuse, and waste) can be described as the intentional deception to get an unauthorized or unwarranted benefit. A pharmacist that charges both the patient and the insurance company for a prescription is classified as fraud. A physician that prescribes unneeded tests for a patient to generate additional revenue is an example of waste. A pharmacist the receives a “brand necessary” prescription and enters the brand in the computer, charges the insurance company for the brand, but gives the patient a cheaper generic is an example of abuse. Many deceptive actions classify into more than one of these categories and for this reason they have been merged into one category as fraud, waste, and abuse by the government. In recent years the government has allocated more federal funds to combat the increase in fwa. Federal and state laws have been enacted to block the proliferation of abuse and increase the penalties associated with such violations. The government has also increased the number of audits...
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