What is Fraud or Abuse?

Fraud, as defined by Federal Regulation (42CFR455.2) , is an intentional deception or misrepresentation that someone makes, knowing it is false, that could result in the payment of unauthorized benefits. A scheme does not have to be successful to be considered fraudulent.

Abuse involves actions that are inconsistent with sound medical, business, or fiscal practices. Abuse, directly or indirectly, results in higher costs to the healthcare program through improper payments that are not medically necessary.

The primary difference between fraud and abuse is a person's intent. That is, did they know they were committing a crime? 

In either case, the key component is that the perpetrator knew or should have known that the act was improper or inconsistent with sound practices.

Fraud and abuse can take many forms. Some common forms may include, but are not limited to:

·         Billing for services or supplies never provided.

·         Misrepresenting the services rendered.  (miscoding the actual service and/or misuse of modifiers to bypass NCCI edits)

·         Misrepresenting the diagnosis to justify payment for services.

·         Soliciting, offering or receiving a kickback, bribe or rebate.

·         Secret, unlawful agreements between a supplier, beneficiary, and/or other healthcare provider that results in higher costs or charges to a carrier.

·         Deliberately applying for more than one payment for the same service.

·         Unlawfully completing a Certificate of Medical Necessity.

·         Falsifying documents.

·         Misrepresenting the place of service.

·         Presents or causes to be presented claims to a Federal health care program that the person knows or should know is for an item or service that was not provided as claimed or is false or fraudulent. 42 U.S.C. § 1320a-7a(a)(1)(A) and (B).

·         Violates the anti-kickback statute (42 U.S.C. § 1320a-7b(b)) by knowingly and willfully: (1) offering or paying remuneration to induce the referral of Federal health care program business; or (2) soliciting or receiving remuneration in return for the referral of Federal health care program business. 42 U.S.C. § 1320a-7a(a)(7).

·         Presents or causes to be presented a claim that the person knows or should know is for a service for which payment may not be made under 42 U.S.C. § 1395nn, the physician self-referral or "Stark" law. 42 U.S.C. § 1395nn(g)(3).

The proof of the allegations is the existence of the claims regardless of the payment or denial. 

The scheme does not need to be successful to be considered fraudulent.