The Centers for Medicare & Medicaid Services report that in 2016, U.S. health care spending hit $3.3 trillion. Meanwhile it’s estimated that tens — if not hundreds — of billions of dollars are lost to health care fraud every year.
According to the Pennsylvania Insurance Fraud Prevention Authority, health care fraud happens when an insured individual or health care provider provides false or misleading information to a health insurance company with the intention of having it pay for unauthorized benefits to the policyholder, health care provider or another individual or party.
As an employer, the unfortunate truth is that you could experience one or both sides of this coin, with employees committing insurance fraud or being victimized by fraudsters. Either situation can negatively impact future insurance coverage, so it’s important to take steps to detect and prevent health insurance fraud at your company.
How Health Care Fraud Can Impact Your Business and Employees
According to Smart Business, there are multiple ways in which health insurance fraud can have negative effects on you and your employees alike. Some of the more common impacts include:
- Higher insurance premiums: In response to the challenges of detecting and preventing fraud, insurance companies may be forced to increase premiums. Increased premiums can make coverage unaffordable — both for employers and employees.
- Reduced benefits: As insurance premiums continue to increase, employers may be forced to cut back on the range of benefits they offer to employees, for example dental and vision coverage.
- Higher copays and deductibles: For many employers, the only way to affordably offer employee health insurance is to opt for higher copays and deductibles, which can put a strain on employee finances and negatively influence care decisions.
What Is Considered Fraud?
All covered employees and their covered dependents are considered insured members — which means that there’s a potentially wide network of people to keep in mind when it comes to fraud. While there are many types of health care fraud, the most common include:
- Allowing someone else to use your identity or insurance cards to receive health care services
- Using health insurance benefits to pay for prescriptions not provided or prescribed by a doctor
- Adding an ineligible individual to an insurance policy by providing false information
- Failing to remove someone who is no longer eligible from a policy
- Visiting several doctors in order to obtain multiple prescriptions
- Claiming injury from a staged accident in order to receive care, medication or reimbursement
- Exaggerating a claim
Detecting and Preventing Health Care Fraud
You may not want to think that you hire and work with people who would commit fraud. In some cases, fraud could be committed unintentionally, while in others, health care needs and financial stress could come together to warp decision-making. Unless it’s already proven to be a problem among your staff, make sure to stay positive and articulate the benefits of proactively tackling fraud before it harms anyone.
Start by educating employees on what constitutes fraud and impress on them the many unfortunate consequences of committing it. On top of increased premiums and reduced benefits for other employees, after all, those found guilty of fraud may face fines and even incarceration. Informed employees will know important information, including:
- How to review all policy and benefits statements received, to ensure that the billed or itemized services were actually performed, following up on any questionable visits, treatments or procedures listed
- The value of treating all insurance, dental, vision and prescription cards as if they were credit cards — in other words protecting them and accounting for them at all times — since identity thieves use medical and insurance cards to commit fraud
- How to report any suspected fraud to the insurance provider and any other relevant entities
While employees may have reservations about reporting potential fraud committed by their co-workers, encourage your staff to contact their insurance provider anonymously to initiate an investigation. Many carriers offer online reporting, so be sure to provide employees with the information and resources they need to keep their benefits running smoothly. Remember, everyone involved stands to win or lose when it comes to health care fraud.
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