What is Fraud

What is Fraud?

The intentional misrepresentation of a material fact on a health care claim in order to persuade BCBST to process and pay a false claim.

The act of deceiving or misrepresenting of health care services.

Five Elements of Health Care Fraud
  • Misrepresentation or concealment of a material fact on a health care claim
  • Knowledge of the falsity of the misrepresentation
  • Intent to deprive or harm BCBST and its customers financially
  • BCBST, a victim, acting on the misrepresentation
  • Financial damage to BCBST and its customers
Who Commits Fraud?
  • Providers
  • Subscribers
  • Non-Subscribers
  • Groups
  • Claims Processors
  • Employees
  • Brokers and Agents

Where Can Fraud Occur?

health care fraud chart

What is the Cost of Health Care Fraud?

The cost of health care fraud is estimated by the American Medical Association, National Health Care Anti-Fraud Association, Certified Fraud Examiners, and Department of Health and Human Services/Offices of Inspectors General to be between 3% and 14%. In 2000, BlueCross BlueShield of Tennessee paid $7.4 billion in health care benefits. This means BCBST could have potentially lost between $ 222,000,000 and $1,036,000,000.

3% = $222,000,000 (Two Hundred Twenty-Two Million)

14% = $1,036,000,000 (One Billion Thirty-Six Million)

What is Being Done about Health Care Fraud?

  • Legislative Health Care Initiatives
  • Private insurance companies are establishing Special Investigation Units (SIUs)
  • FBI is dedicating resources to health care fraud
  • States have established Medicaid Fraud Control Units (MFCUs)
  • Health Care Task Forces have been established in the Eastern, Middle, and Western Districts of Tennessee, including the following agencies:
    • Assistant US Attorney General
    • Federal Bureau of Investigation
    • Postal Inspector
    • Federal Drug Administration (FDA)
    • Office of Inspector General (OIG)
    • Tennessee Bureau of Investigation
    • BlueCross BlueShield of Tennessee’s SIU
  • National Health Care Anti-Fraud Association 1985
  • Association of Certified Fraud Examiners 1989

This process may result in administrative or civil action taken against the person committing the act, in an attempt to recover dollars lost. Any act believed to be of a criminal nature will be referred to the appropriate law enforcement agency for their consideration.