Health Care Fraud and Abuse

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| | |Health Care Fraud and Abuse | | | | | | |6/17/2012 |

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Health care fraud is the filing of dishonest health care claims to obtain a profit and is considered a white collar crime. Health care abuse is when someone overuses or misuse services. Both, Health care fraud and abuse, in the United States is an ongoing issue and is costing the United States government billions of dollars. Every time a fraudulent act is perpetrated the insurance company passes the cost to its customers. Due to the high volume of health care fraud statistics shows that 10 cents to every dollar spent on health care goes toward paying fraudulent health care claims. The federal government’s action to fight healthcare fraud and abuse brought forth The False Claims Act (FCA) of 1986. Under the FCA, the United States may sue violators for damages, plus $5,500-$11,000 per false claim. In a further effort to fight fraud and abuse, in 1993 the Attorney General announced that tracking healthcare fraud and abuse would be a top priority for the Department of Justice. The Health Insurance Portability and Accountability Act (HIPPA) of 1996 established the Healthcare Fraud and Abuse Control program (HCFAC). HHS and the Attorney General allocated $248,459,000 to HCFAC to fight healthcare fraud and abuse in 2007. (Report, 2008) Health care fraud and abuse has increased within the past decade. Today the Health and Human Services (HHS) and the Office of the Inspector General (OIG) projected that fraud and abuse accounts for between 3 and 15 percent of expenditures for healthcare in the United States. Other agencies, such as The National Healthcare and Antifraud Association Report, the Congressional Budget Office, and the US Chamber of Commerce suggest that fraud and abuse costs range between 3-10 percent, 10 percent, and 15 percent respectively. According to this data, the annual estimated cost of healthcare fraud and abuse ranges between $100-170 billion in America. (Advocacy, 2011) Due to the increase in healthcare fraud and abuse in the current U.S. health care system, how effective is the OIG’s health care fraud and abuse program and what actions can health care organizations take to decrease their liability? In 2011, the Department of Justice opened more than one thousand cases regarding healthcare fraud and/or abuse. During, this year the Federal Government was able to win or negotiate $2.4 million in health care settlements and judgements. The OIG alone with the HHS and attorney general has successfully prosecuted the most flagrant cases of healthcare fraud and abuse. HHS/OIG imposed civil monetary penalties against, among others, providers and suppliers who knowingly submitted false claims to the Federal government. HHS/OIG also issued numerous audits and evaluations with recommendations that, when implemented, would correct program vulnerabilities and save program funds. The Office of Inspector General or OIG has the responsibility to help maintain the integrity of the Department of Health and...
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