Canada Health Insurance

From a legal point of view, fraudulent claims and hospital fraud are classed as a type of ‘white collar crime’, a term coined in 1939 to describe offences committed by reputable professionals within their occupations.

Fraudulent claims usually entail the filing of dishonest health care claims. There are many areas within the medical system that can be manipulated as they are not properly policed or are subject to rules that restrict the ability to investigate and prosecute. Moreover, it is difficult to prove intent to obtain money illegally without indisputable evidence. 

Practitioner/Patient Wrongdoing
There are two types of fraudulent medical claims: those committed by practitioners and those committed by patients. Practitioner schemes are becoming more common and are particularly damaging as trust is an important factor in the relationship between doctors and insurance companies.

Practitioners Selling Prescription Drugs
Some practitioners fill out large, needless prescriptions for individuals whose purpose is to sell those drugs on the street for a cut.  The more astute practitioners fill out small prescriptions for multiple false patients and sell the drugs themselves. All prescriptions are entered into a database and copies of those filled for controlled substances are forwarded to the Drug Enforcement Administration. If the illegal prescriptions are widely distributed, the database will not duly recognise the fraudulent activity.

Practitioners Falsifying Forms
It is easy for doctors to falsify medical forms and claims. The most common fraudulent practices are to change dates and names of patients on forms, alter medical histories, provide an incorrect diagnosis, and prescribe additional or unneeded treatment for patients. Here are two other types of hospital fraud: 

• Filing and submitting claim forms for work they did not do
• Filing and submitting duplicate claim forms for services rendered.

Patients Filing Fraudulent Claims
Fraudulent health claims submitted by patients have increased in popularity over the last decade as people have fallen on hard times. The most common forms of medical fraud committed by patients are the following:

• Supplying False Information - A patient who lies or misleads or holds back in completing a medical claim form is committing fraud, and that includes showing fake identification documents to alter eligibility, withholding facts about prior settlements or rejected claims, concealing pre-existing illnesses, and supplying false statements.
• Faking Accident and Injury – A large majority of accident and injury claims are based on bogus or exaggerated injuries. It is relatively simple to overplay an injury and convince a medical professional of the severe extent of the ramifications. In some cases, the doctor will collude with the patient and endorse or amplify the fake injury in order to also benefit from the medical claim. There are unusual instances, such as intentional vehicle collisions, whereby an accident is staged by a person planning to file not only false health claims but other circumstantial claims as well.

Pertinent Consequences
It is believed that, because of the high increase in false medical claims and hospital fraud, on average 10 cents of every dollar spent on health care ends up in the pocket of dishonest claimers, not to mention the fact that insurance premiums are on the rise to compensate for the losses. As the laws and procedures pertaining to fraudulent claims are subject to a 30 day rule, the insurance companies typically have to pay out before the governing bodies have a chance to properly investigate.

Better Detection Ahead
On a positive note, sophisticated methods are being devised to better determinate fraudulent insurance claims. Complex computer programs have been invented to recognise suspicious billing patterns from practitioners and medical related establishments. Some insurance companies have turned to hiring a special investigations team (SI) or private investigators (PI) to take over the reins and identify doubtful claims and hopefully stop unwarranted payments from being issued. These trained experts work alongside law enforcement agencies in order to prevent fraud and duly prosecute in the event of a valid offence.

About the Author:
Adriana Stefania is a freelance writer for Canada Health Insurance. For more information on health insurance for Canadians please visit www.canada-health-insurance.com.