Fraud and Abuse in the U.S. Healthcare System

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Running Head: Fraud and Abuse Fraud and Abuse in the U.S. Healthcare System Tenisha Howard Keller Graduate Professor Cutspec June 12, 2011 Background People can be affected by healthcare fraud and abuse directly and indirectly. Fraud is defined as an intentional deception, false statement or misrepresentation made by a person with the knowledge that the deception could result in unauthorized benefit to oneself or another person. It includes any act that constitutes fraud under applicable federal or state law. Abuse is defined as practices that are inconsistent with professional standards of care; medical necessity; or sound fiscal, business, or medical practices. Intent is the key distinction between Fraud and Abuse. An…show more content…
When it comes to patients, patients commit fraud and abuse insurers and subsidized federal programs to obtain preventable services, payments, and medical procedures. Private insurers play their role in fraud and abuse by subsidizing federal programs in order to dishonor medical claims and keep away from financial responsibility for essential medical services. Increased costs of fraud and abuse results in increased insurance premiums, taxes, and costs for medical treatment. Literature Review Fraud and abuse in our healthcare system indicates a priority of wealth over health, puts patients at risk, and hinders our national interest of quality care. Medicaid and Medicare are especially vulnerable to fraud because eligible individuals may never see their bill for services; it goes directly to a fiscal intermediary (for Medicare) or a designated payer (for Medicaid), (Barton, 2007). In a report made by Jessica Zigmond, Aghaegbuna “Ike” Odelugo speculated on how and why the fraud occurs, "This is a nonviolent crime and is often committed by very educated people, including businesspeople, hospitals, doctors and administrators. It reaches across all ethnic and racial lines." He added that healthcare fraud often preys on what he called an unsuspecting victim base of Medicare recipients: elderly citizens looking for care and attention. The Priority Health Fraud & Abuse department is targeting specific practices in an effort to recover funds and end fraudulent

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