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Fraud & Abuse
THE PROVIDERS' GUIDE TO DETECT & REPORT FRAUD

What is Fraud?
Fraud is “… Knowingly and willfully execute (or attempt to execute) a scheme to defraud any health care benefit program, or to obtain money or property from a health care benefit program through false representations..” [18 U.S.C. 1347].

United States spends more than $1.5 trillion on health care each year; about 15% of the gross national product.

The Government Accounting Office estimates that more than 10% of the healthcare budget is lost to fraud and abuse, which amounts to approximately $150 billion in year 2002.

  • Fraud wastes millions of dollars that can be spent in providing needed health care coverage
  • Fraud increases the cost of health care delivery
  • Fraud endangers the health of patients
  • Fraud undermines public confidence and trust


Common Fraud Schemes in Managed Care
I. Administrative/Financial

  • Falsifying credentials
  • Billing fee-for-service [FFS] for capitated services [double-billing]
  • Accepting kickbacks for referrals of sicker patients to FFS specialists
  • Conducting improper enrollment and disenrollment practices

- Attracting healthy patients or refusing sicker patients
- Persuading of forcing sicker patients to disenroll
- Falsifying medical exemptions


II. Services/Encounter

  • Falsifying encounter data
  • Misrepresenting services provided to meet quality of care standards
  • Billing for services/supplies not provided
  • Upcoding charges and unbundling services
  • Excluding distinct groups of beneficiaries [i.e. patients with chronic conditions or terminal illness]
  • Engaging in under-utilization
  • Regularly denying treatment requests and specialist referral without regard to legitimate medical evaluation


III. Member Issues

  • Falsifying eligibility application
  • Using another person’s health plan identification card to obtain medical care
  • Falsifying/altering prescriptions
  • Misrepresenting medical condition
  • Failing to report third party liability


What Can You Do?

  • Review Care1st Provider Manual section 16.1. Care1st Health Plan Anti-Fraud Policy and Program
  • Report potential fraud immediately to SDHS
  • Educate and train office staff
  • Establish policies and procedures for the prevention, detection and reporting of fraud and abuse
  • Share this important information with your office staff
  • Report potential fraud by calling:
State of California Department of Health Services Medi-Cal Fraud Hotline 1-800-822-6222



   
   
Department of Health Services Anti-Fraud Line
1-800-822-6222
   
Preventing Health Care Fraud (for Members)
   
HIPAA Guidelines
HIPAA Alert - Fall 2002
 
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