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Fraud, Waste & Abuse FAQs

What is healthcare fraud?

Healthcare fraud is the intentional deception or misrepresentation made by an individual, knowing that the misrepresentation could result in some unauthorized benefit to them or to others. The most common kind of healthcare fraud involves false statements or deliberate omission of information that is critical in the determination of authorization and payment for services. Healthcare fraud can result in significant monetary liabilities and, in some cases, subject the perpetrator to criminal prosecution.

What is the difference between healthcare fraud and healthcare abuse?

The difference between fraud and abuse is the intent behind the action. Fraud is intentional deception or misrepresentation with knowledge that the information is false. Abuse involves actions that are inconsistent with sound fiscal, business or accepted behavioral healthcare practices and result in an unnecessary cost or in reimbursement for services that are not medically necessary or that fail to meet professionally recognized standards for healthcare. Abuse can result in the same process impediments and unnecessary cost of care as fraud.

What are some common examples of healthcare fraud?

Some of the most common examples of these types of fraudulent acts include:

  • Billing for services that were never rendered—either by using genuine patient information, sometimes obtained through identity theft, to fabricate entire claims or by padding claims with charges for procedures or services that did not take place.
  • Billing for more expensive services or procedures than were actually provided or performed, commonly known as “upcoding.”
  • Performing medically unnecessary services solely for the purpose of generating insurance payments.
  • Falsifying a patient’s diagnosis to justify tests, surgeries or other procedures that aren’t medically necessary.
  • Billing a patient more than the co-payment amount for services that were prepaid or paid in full by the benefit plan under the terms of a managed care contract.
  • Accepting kickbacks for patient referrals.
  • Waiving patient co-payments or deductibles and over-billing the insurance carrier or benefit plan.

Why should I be concerned about healthcare fraud?

The services that you provide to Magellan members are subject to both federal and state laws and contract requirements designed to prevent fraud, waste and abuse in government programs (such as Medicare and Medicaid) and private insurance. We have a comprehensive compliance program in place, including policies and procedures to address the prevention of fraud, waste and abuse. Premier Patient Care, in conjunction with our Health Plan Partners and government agencies, actively pursues all suspected cases of fraud, waste and abuse. Please see our Compliance Program. 

How can I prevent healthcare fraud and abuse?

You can avoid fraud and abuse by taking the time to ensure all member information you submit is accurate and the services provided are in the best interest of your patient. When considering member care and submitting authorization requests and claims to Magellan, ask yourself the following questions:

  • Have I listed the right patient and verified eligibility?
  • Have I verified the patient’s identity with the appropriate picture identification?
  • Is this service medically necessary?
  • Do I have the correct diagnostic and CPT codes?
  • Are my dates of service correct and length of each session accurate?
  • Have the services for which I am billing been performed?