How to Prevent Healthcare Fraud and Abuse

Healthcare costs are already high enough in this country. The last thing we need is to send costs even higher by not taking a proactive stand against fraud and abuse. Both private healthcare plans and Medicare are subject to staggering levels of fraud and abuse every year. It is not good because every dollar of fraud and abuse is passed on to the rest of us.

Johns Hopkins HealthCare estimates that tens of billions of dollars are lost every year to fraud and abuse. Furthermore, the fraud and abuse are not just limited to federal health insurance programs. It also affects state insurance and private plans. It is so serious that the federal government has published an in-depth guide explaining how fraud and abuse occur and how we can all prevent it.


Learn to Recognize It

The first step in preventing abuse and fraud is learning to recognize it. Johns Hopkins HealthCare defines healthcare fraud as "any deliberate and dishonest act committed with the knowledge that it could result in an unauthorized benefit to the person committing the act or someone else who is similarly not entitled to the benefit."

Medicare fraud is essentially the same thing except that it is limited only to the federal Medicare program. Whether you are talking private insurance or Medicare, healthcare fraud and abuse takes many forms:

  • Misrepresentation of healthcare services and/or those providing them
  • Billing for items and services that have not been rendered
  • Billing for items and services that are either medically unnecessary or not properly documented
  • Seeking payment or reimbursement for unbundled services
  • Seeking payment or reimbursement for up-coded services
  • Misusing insurance claim codes
  • Charging excessive rates for services or supplies.

The unfortunate thing is that healthcare fraud and abuse often take place in the shadows. Assuming you have a health insurance plan that requires a co-pay at the time of service, the co-pay is the only fee you are made aware of. You have no idea what your provider is charging the insurance company because you never see a breakdown of the details.


Ways to Prevent It

It can be difficult to recognize healthcare fraud as it takes place. If you discover something after the fact, by all means report it. Otherwise, there are a few things that can be done in an attempt to prevent fraud and abuse before occurs:

  • Validating Insurance – Service providers can and should validate insurance before rendering services. This is done by examining patient ID cards and verifying policies by checking numbers.
  • Checking Accuracy – Both service providers and patients can help prevent abuse and fraud by checking records for accuracy. The impetus here is more on service providers as they are the ones who prepare bills and insurance claims.
  • Avoiding Treatments – The biggest thing patients can do is avoid unnecessary treatments, tests, and prescriptions. A simple example is refusing an antibiotic prescription for a viral infection. Antibiotics have no effect on viruses, so prescribing an antibiotic for the common cold is abuse of the system.
  • Reporting Suspicions – At the first sign of potential fraud, reporting is a must. Doctors should report things like missing prescription pads. Pharmacies should report suspicious prescriptions. Patients should report suspicious billing activities.

Healthcare fraud and abuse is a very real thing that costs billions of dollars annually. It is one of the primary reasons that healthcare services cost so much in this country. If we all do what we can to recognize and prevent it, we might be able to keep future price increases to a minimum.



  1. JHHC –
  2. CMS –