Healthcare fraud and abuse are two sides of the same coin

Key Takeaway:

Healthcare fraud and abuse are different but related kinds of malpractice. They affect everyone concerned: the patient, the healthcare unit, the healthcare sector, and eventually, the economy.

Healthcare fraud and abuse are serious malpractices that can have very grave consequences for the patient, the hospital and the healthcare sector. They can also cost taxpayers heavy amounts of money.

Healthcare fraud

There is some distinction between healthcare fraud and healthcare abuse. Healthcare fraud is said to happen, according to, when Medicare gets billed for a service or supply the end user never gets. These fraudulent claims result in loss of billions of dollars of revenue to Medicare each year. Healthcare fraud could be said to happen when:

  • False statements are submitted knowingly or facts are misrepresented with the purpose of obtaining a federal health care payment for claims for which the person is not entitled
  • A person knowingly solicits, pays, or/and accepts a payment with the intention of inducing or rewarding referrals for services or items that any of the federal healthcare programs reimburse
  • Eligibility is falsified
  • Prohibited referrals are made for select, designated health services

Healthcare abuse

Although related, healthcare fraud and abuse are not totally similar to each other in spirit. A healthcare abuse can be when physicians do not comply with or bypass established good medical practices or administer treatments that are not necessary. This is less serious than fraud in terms of intent, but carries the same consequences: loss of billions of dollars to the exchequer and potential damage the patient's health and the physician's and/or healthcare provider's reputation.

Some examples of healthcare abuse

These are some of the examples of healthcare abuse:
  • When services that are not medically warranted are performed and charged for
  • When services and/or supplies are charged in excess of their actual value
  • When codes on a claim are misused
  • When the physician or healthcare provider fail in maintaining proper financial or medical records
  • When they refuse to furnish or allow access to medical or financial records
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