Free «Health Care Fraud and Abuse» UK Essay Sample

Health Care Fraud and Abuse

What is Healthcare Fraud and how is Fraud Different from Healthcare Abuse?

Health care fraud is the intentional and purposeful executing of a premeditated plan to deceive a healthcare benefits. It is undertaking proceeds or property through false or pretense concerning anything that belongs to a health program. Healthcare abuse is an action that is not in agreement with the laid down rules governing medical practices. Abuse is an unintentional action that leads to an over payment by a healthcare program (Young, 2011). Healthcare fraud differs from abuse in that the action is not intentional or is hard to establish whether it is intended or not intended event by investigations. Fraud is an act that is against the ethical guidelines of the medical professional. Abuse is a demonstration of incompetence by the perpetrator of the act.

Discuss Five Causes of Financial Loss to Health Funds

The causes of loss of health funds include payment of claims that are exempted from payment due to government regulations or health scheme laws. This includes costs for cosmetic, medical services. Another cause of the loss is the issuance of wrong certificate for a patient ailment. An example of healthcare certificate is 3B used for acute care (Young, 2011). A pre-existing ailment is any health situation, ailment, condition or symptoms that a patient has experienced for a period of six months before being admitted to a hospital. Ex-gratia payment is another cause of loss for healthcare plan. This is when a claim is processed, although it does not meet the threshold of conditions for payment motivated by the act of kindness or compassion. Incorrect claims are payments executed against services, which were not offered. This type of payment arises because of addition of items or inclusion of wrong items in the claim (Paul et al., 2007).

How Does Fraud Impact on Health Care?

Fraud in the healthcare scheme has contributed to the rising cost of healthcare in general. Healthcare fraud costs the government millions of dollars every year. Fraud is the single most expensive contributor to the elevated cost of health care. Other factors, such as new technology, do not come close in contributing to this cost increase. According to Sultz & Kristina, (2006), from the 1960s, healthcare has risen in cost from 28million dollars to 1.9 trillion dollars per year by 2004. This increase is not in proportional to the per capita income of American population during the same period. Moreover, most Americans became unable to afford healthcare services (Sultz & Kristina, 2006). Healthcare cost has been growing at a higher rate than the rate of economic growth. Thus, fraud in the healthcare sector has affected the entire economy pushing up the cost of living through taxes.

Discuss Five Ways HBF Detects Potential Loss

HBF detects potential loss through auditing of the Diagnosis Related Group (DRG) to verify whether there is upcoding. Upcoding is the process of miscoding and/or misrepresentation of patient data for high reimbursement. HFB also employs the use of data mining to find unusual data matching using statistical computer models. This process uses statistic to determine the usual data pattern and isolate deviation from this pattern for further scrutiny. Tip off from a member of the public is another possible way to detect potential loss. Through hotlines and public feedback channels, the public alerts HBF about any unusual dealings involving health providers. Surveying of members is provided in order to validate the claim of services (Sultz & Kristina, 2006). HBF is able to detect inconsistency of the information provided by members to the survey. A random audit on staff and providers can reveal any cases of inconsistency. This enables HBF to do a spot check detect any data or unusual happening that may have led to fraud.

What Was Described as ‘Wrongful Activity’ and Suggest How This Can Be Managed

Wrong activity implies actions that are aimed at defrauding a healthcare scheme of money through misrepresentation of information about a patient. Some of the wrong activities include charging for items and services that have not been provided. This is aimed at inflating the final bill to be presented to the healthcare plan. Another activity is over-servicing to include services that were not necessary for a particular case. Over-servicing is aimed at inflating the total cost of the service (Young, 2011). Members and providers collude to defraud the healthcare scheme through over-servicing and claiming for services that were not offered. False claim is another wrong activity trough which healthcare plans lose money.

One of the ways to manage wrong activities is through reviewing of provider records to detect and discourage these activities. This can be concentrated on providers who have higher claims. Reviewing of internal systems can also help to discourage collusion between staff and provides. This can also include strong control systems. Providers who defraud the healthcare scheme can be reported to their boards or association for possible blacklisting or being banned from operating. Healthcare plan can also institute criminal proceedings against providers and members who are discovered to practice wrong activities. Healthcare audits can undertake civil recovery for the value lost from fraud to a provider. These measures discourage wrong activity and loss to the healthcare scheme (Young, 2011).


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