Health care fraud involves the filing of dishonest health care claims in order to turn a profit. Fraudulent health care schemes come in many forms. For example, patients commit fraud when they sell subsidized or fully covered prescription medication on the black market for a profit, use transportation benefits for non-medical purposes, or falsify information on an application for medical services. Practitioners commit fraud when they bill for care that was never rendered, file duplicate claims for the same service rendered, or waive patient co-pays.
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When health care fraud occurs, the health care provider passes along the costs to its customers. Statistics show that because of the pervasiveness of health care fraud, 10 cents of every dollar spent on health care goes toward paying for fraudulent health care claims.
Law requires health insurance providers to pay a legitimate claim within 30 days. The FBI, U.S. Postal Service, and Office of the Inspector General are charged with investigating health care fraud. However, because of the 30-day rule, these agencies rarely have enough time to perform an adequate investigation before an insurer must pay.
A successful prosecution of a health care provider that ends in a conviction can have serious consequences. The health care provider faces incarceration, fines, and the loss of his or her right to practice in the medical industry.