Healthcare is a $2.7 trillion industry in the U.S. alone, and it is estimated that one-third is lost due to different forms of waste, mismanagement, and abuse. Waste includes such activities as providers prescribing unnecessary and redundant testing, devices and medications that are not better than the cheaper ones already in use, etc.
The common examples of fraud and abuse in healthcare include the following:
- Illegal medical billing practices in which claims are falsified.
- Multiple claims are filed by different providers for the same patient.
- Patient identities are stolen and used to gain reimbursement for medical services never provided.
- Collusion between unprincipled providers and their patients in which money from claims is shared.
It is estimated that 3%-10% of annual healthcare costs in the U.S. can be attributed specifically to fraudulent billing.
Further, a recent GAO report states that 68% of all medical fraud is the result of false billing and that healthcare providers are complicit in 62% of those cases, while patients are complicit in 14% of those.