Benefits fraud occurs when you intentionally submit false or misleading information to your insurance provider for the purpose of financial gain, and it can take many forms. Examples include (but are not limited to):

• Billing for health or dental services that were never received
• Submitting the same claim to multiple insurers to double your reimbursement
• Letting someone not covered by your plan use your benefits.

Benefits abuse occurs when you claim for excessive products or services beyond what would be considered as reasonable or medically required to maximize the benefits you feel you are owed. Examples include (but are not limited to):

• Plan members and/or their dependents using all the annual maximums in their policy every year when products and services provided are not medically necessary.
• Providers that are mixing marketing practices and treating patients (use of incentives). 
• Encouraging plan members to use all of their benefits before the end of the year which drives up plan utilization.
• Providing unnecessary treatment to patients to maximize billings.

Benefits fraud occurs when you intentionally submit false or misleading information to your insurance provider for the purpose of financial gain. Benefits fraud is a crime. Benefits abuse is a result of benefits being used when the products or services are not medically necessary. Although abusing your benefits is not a crime, preventing benefits abuse is equally as important as preventing benefits fraud when it comes to the sustainability of benefits plans.

Benefits fraud and abuse can be committed by health or dental service providers, plan members or both. You can become involved in benefits fraud without even knowing it. For example, a health or dental care provider could ask you to sign a blank claim form which they can use dishonestly later without your knowledge. If they do, you are involved in benefits fraud. While not fraud, a health or dental care provider may encourage you to “use it or lose it” when it comes to your benefits; if you are using your benefits to the maximum when products or services are not medically necessary, you are abusing your benefits. 

Benefits fraud and abuse affects us all. You might think that by committing benefits fraud you’re stealing from your insurance provider, but in fact, you are stealing from your employer and your coworkers.

Learning how to use your benefits appropriately and how to recognize benefits fraud and abuse can help you refuse it and report it. If you suspect your health or dental service provider, coworkers, or others you know are encouraging you to submit a fraudulent claim, or something just doesn’t feel right, report it to your employer or insurance provider immediately. Report fraud anonymously here: report benefits fraud

Benefits fraud can include many different scenarios, such as:

• Billing for services that never occurred
• Submitting a claim for the same service to multiple insurers to increase your reimbursement
• Health or dental service providers offering excessive cash incentives to attract new patients
• Health or dental service providers falsifying medical conditions to provide an unnecessary treatment or service
• Health or dental service providers and plan members conspiring to increase the amount of a claim to ensure full coverage so the plan member doesn’t have to pay the deductible
• Claiming services different than those provided
• Using your benefits to purchase items not covered under your benefits plan, such as purchasing non-prescription sunglasses and submitting the claim as prescription eyeglasses
• Transferring unused benefits to others, such as using a dependent’s unused benefits to cover another’s health or dental expenses
• Claiming prescription drugs on behalf of others who are not covered under your plan

Benefits abuse can include many different scenarios such as (but not limited to):

• Plan members and/or their dependents using all the annual maximums in their policy every year when products and services provided are not medically necessary.

• Providers that are mixing marketing practices and treating patients (use of incentives). 

• Encouraging plan members to use all of their benefits before the end of the year which drives up plan utilization.

Providing unnecessary treatment to patients to maximize billings.

People commit benefits fraud and abuse for a number of reasons, such as:

• They don’t think it is prohibited
• They are in a bad financial situation and need the money
• They think healthcare is too expensive and they wouldn’t be able to afford it otherwise
• They think it is easy money with no risk
• A service provider actively offered or suggested it
• Colleagues, friends or family members encouraged them
• They think benefits are part of their salary, so it doesn’t matter how they are used
• They don’t think it hurts anybody
• They think everyone else is doing it
• They think it is unlikely that they will get caught
• They don’t think about the consequences

Yes. Fraud is a serious crime and depending on the severity of the case, you could go to jail for it.

Yes. If you are convicted of benefits fraud, you will have a criminal record.

Yes. Benefits fraud is stealing from your employer. It’s a serious crime that may cost you your job.

You can report benefits fraud directly to your employer or your insurance provider, or if you don’t want anyone to know that you are reporting it, you can do it anonymously here.

Yes. If you would like to report benefits fraud but you don’t want anyone to know that you are doing it, you can report it anonymously here.

It’s easy for people to get caught committing benefits fraud because employers and insurance companies actively look for it. Employers often review how their benefits plans are being used, and sometimes hire data analysts to detect suspicious activity. Insurance companies have elaborate systems and sophisticated technology in place to detect unusual patterns and flag suspicious claims. Some also conduct random audits. Some investigations are started from tips from the public. Insurance companies can share the evidence from an investigation with your employer.

Yes. Health and dental service providers can commit benefits fraud by:

• Billing for services or treatments that never occurred

• Encouraging patients to use their benefits to purchase products not covered under their benefits plan but claim them as products that are covered

• Offering substandard medical products with large incentives like free gifts or cash, along with an inflated receipt

• Falsifying medical conditions to provide unnecessary treatments or services

• Conspiring with plan members to increase the amount of a claim to ensure full coverage so the plan member doesn’t have to pay the deductible

• Encouraging a patient to “use it or lose it” in their marketing of services

An explanation of benefits, also referred to as an EOB, is a written form provided by an insurer detailing a plan member’s claim and itemizing what is covered and what the plan member is responsible for paying according to their plan. Reviewing your EOB and understanding what it means can help you use your benefits appropriately and avoid getting involved in benefits fraud unintentionally.

Health and dental benefits fraud is a crime with serious consequences that can result in loss of employment, a criminal record, and even jail time for you or your patients. As a healthcare provider, you could also lose your reputation, patient trust, your source of income and your license.

Although benefits abuse is not a crime, the impacts on the sustainability of your benefits plan are the same as if you were to commit benefits fraud. The result of both is the increase of utilization which could potentially result in increased premiums or reduced coverages.

Delisting means that the services and supplies you provide will no longer be eligible for reimbursement under the delisting carrier’s benefits plans. For example, if an insurer finds that you have not been following correct claim submission procedures they may decide to delist you.

Some ways healthcare providers can maintain good standing include following the claim submission procedures outlined by the insurer and completing claim forms clearly and accurately. You should also keep detailed records of the services and supplies you provide so that you can verify that you have followed correct procedures when asked.

To submit a claim correctly, whether on paper or electronically, follow the insurer’s claim submission procedures and ensure that the invoice and receipt accurately reflect the services or supplies provided. Do not leave any fields blank; enter ‘0’ or ‘NA’ if needed. A receipt should not be issued until the patient has received and paid for the service or supply. Learn more about receipt best practices.

You may offer your patient a discount on your services or products (where permitted by regulation), but the discount must be applied and clearly stated on the invoice or receipt submitted with the insurance claim. The invoice should state the total amount, including the discount.