Legal Definitions - health care fraud

Health care fraud refers to any intentional dishonest act committed to obtain an unauthorized benefit or payment from a health care program or insurer. It is a type of white-collar crime that can be perpetrated by individuals, medical professionals, hospitals, pharmacies, or other health care entities. The core element is a deliberate misrepresentation or deception made for financial gain, which ultimately drives up health care costs for everyone.

Here are some examples illustrating different forms of health care fraud:

• Upcoding by a Medical Imaging Center

  Imagine a medical imaging center that performs a standard MRI scan for a patient. However, when submitting the bill to the patient's insurance company, the center intentionally codes the service as an "MRI with contrast and advanced 3D reconstruction." This latter procedure is significantly more expensive, even though no contrast dye was administered and no advanced reconstruction was performed.

  This illustrates health care fraud because the imaging center is submitting a dishonest claim for a more costly service than what was actually provided. Their intent is to receive a higher reimbursement from the insurer, thereby profiting through deception.

• Pharmaceutical Company Kickbacks to Physicians

  Consider a scenario where a pharmaceutical company offers a doctor substantial "consulting fees" or "educational grants" in exchange for the doctor exclusively prescribing the company's new, expensive medication. The doctor then begins prescribing this drug to many patients, even when equally effective and much cheaper generic alternatives are available, or when the drug may not be the most appropriate treatment.

  This is a form of health care fraud because the pharmaceutical company is providing an illegal inducement (kickback) to influence the doctor's prescribing decisions. This leads to unnecessary expenses for patients and their insurers, and can compromise the integrity of medical care by prioritizing profit over optimal patient outcomes.

• Patient Misrepresentation for Eligibility

  An individual applies for a state-funded health insurance program designed for low-income residents. On their application, they deliberately underreport their income and fail to disclose significant financial assets, such as a second property they own, to meet the eligibility criteria for the program. In reality, their true financial status would disqualify them from receiving these benefits.

  This demonstrates health care fraud because the individual is intentionally providing false information to gain access to health care benefits they are not entitled to. This deception defrauds the government program and ultimately the taxpayers who fund it.