Types of Fraudulent Acts and Examples of Potential Fraud

1. Fabrication of Claims
   A person uses real patient names and insurance information to make up entirely false claims or adds false charges for treatments or services that were never rendered to otherwise legitimate claims. Examples include (but are not limited to) a physician who creates claims for office visits/treatments that never took place, or a physician who routinely adds charges for services, such as X-rays or laboratory tests that were never performed.
   
2. Falsification of Claims
   A person deliberately misstates one or more pieces of information on a claim for the purpose of receiving a payment (or higher payment) to which he/she is not entitled. Examples of such falsification includes:
   • Misstating patients' symptoms or diagnoses and/or the procedures performed, to obtain payment for otherwise non-covered services (cosmetic surgeries, "alternative" therapies) and/or performing medically unnecessary services for the purpose of being paid for those services.
   • Falsifying the service dates so it appears the service was rendered while the patient was covered by insurance.
   • Falsifying the identity of the provider of services, to obtain payment for services rendered by a non-covered and/or non-licensed provider. Examples include (but are not limited to) billing fitness-center massages as licensed physical therapy, and billing non-covered weight-loss treatment as in-patient psychiatric treatment--e.g., for major depression.
   • "Upcoding," or falsifying the type of services provided, to obtain a higher payment. Examples include (but are not limited to) billing a "Brief" initial office visit as a "Moderate Complexity" office visit, and filling a prescription with the generic equivalent but billing for the higher-priced brand-name drug.
   • "Unbundling," or deliberately billing separate charges for numerous services for which there is one billing code and allowance.

 

Examples of Potential Fraud
In addition to investigations being performed in response to a customer complaint, we also rely on our internal staff to identify situations that may warrant further investigation. These include:

• Inconsistency between the patient's diagnosis, history, and the billing records.
• Provider's advertisement of "free" services or prescriptions.
• Provider's lack of supporting documentation for an audit.
• Unusually high number of patients billed as new patients.
• High-dollar claim for services rendered soon after effective date or just before termination of coverage.
• Explanation of Benefits statement returned as "undeliverable."

The listing is not all-inclusive, nor does it suggest that fraud is committed in specific health care specialty areas. It is strictly intended to highlight the types of signals insurance companies and their investigative units will be sensitive to in their fraud-detection activities--either in the work of claims-review personnel or through computer-based analysis of claims and billing activity.

 

Consumer Tips

1. There is no such thing as "free care." Ever see a newspaper ad promising your first exam is free? Is the exam really free? Or, will you be asked to provide your insurance information? If you did provide your insurance information on the day of your "free exam," you may be surprised to find that exam was paid for by your insurance company.
   
   
2. Never provide your insurance information over the phone.
   Ever receive a telephone call from someone who inquires about your medical conditions? Has this person ever offered to send you a device to ease your pain? Did they ask for your doctor's name and telephone number, your insurance number? If you answered yes to any of these questions, you may have been the victim of fraud.
   
   
3. Never allow anyone into your home to test your hearing.
   Has anyone telephoned you suggesting they come into your home to test your hearing? Were you told you needed hearing aids? Was the individual that tested you licensed by the State of New York? If not, your test results may not be correct. If you feel you have a hearing problem, speak to your doctor. Or, have your hearing tested by a licensed audiologist or otolaryngologist.
   
   
4. If your health insurance contract states you are responsible for a deductible and copayment, you ARE responsible for paying this portion of the fee. Many health insurance contracts do not cover "free care." If you are responsible to pay a portion of your care, and, it's free to you, it's free to us. Since doctors are not in the business to give away care, you may find the doctor is charging your insurance more money than usual, just to make up for the portion you do not pay.
   
   
5. Leaving your spouse on your health insurance contract after your divorce date is not appropriate. If you are divorced and have been instructed by the court to provide health insurance for your former spouse, you must remove him/her as of your date of divorce and provide a separate contract for him/her. If you fail to remove your spouse from your contract, you may be required to pay the cost retroactive to your divorce date, or, the total amount paid by your insurance on your former spouse's behalf.
   
   
6. The person listed as your spouse must be your legal spouse. New York State does not recognize common law marriage. Therefore, if you are not legally married, you may not list a spouse on your contract. The only exceptions to this are those employers that allow domestic partners to be covered. As in the situation mentioned above, you may be asked to reimburse your insurance company for any claims paid on the spouse's behalf. Or, if you reside in a state where the law specifies that erroneous or misleading information on an application for coverage is a crime, you may be committing insurance fraud.
   
   
7. Providing erroneous or misleading information on a claim form, or submitting a claim with erroneous or fabricated information is considered insurance fraud.
   Most states require you sign a claim form when submitting a bill for reimbursement. Usually, your signature will be directly beneath a statement that certifies the information stated on your claim form and the bills attached to it are accurate to the best of your knowledge. Your signature beneath this statement signifies you accept total responsibility for the claim submission.

 

Our Special Investigations Unit

Four full-time employees whose main function is to investigate allegations of fraud and abusive billing practices staff the Special Investigations Unit. The staff includes a Certified Fraud Examiner, a Certified Public Accountant, and two members with expertise in all aspects of health insurance.

The unit is member of the National Health Care Anti-Fraud Association which provides current information on legislation and continuing education for all staff members.

Members of the unit also attend local, state, and federal task force meetings where information and ideas are exchanged between law enforcement agencies and insurance companies.

 

Our Relationship with Law Enforcement Agencies
The Special Investigations Unit has an ongoing relationship with the New York State Insurance Department Frauds Bureau. As required by Article IV of the Insurance Law, the Insurance Department is notified of all instances of suspected fraud. The Unit works closely with the Frauds Bureau on these investigations.

The Unit also works directly with the local district attorneys, Medicaid Fraud Control Units, United States Attorney General's offices as well as each entity's investigative arms. The department manager is part of the U. S. Attorney's Office Task Force on Health Care Fraud. The Unit also has ongoing relationships with regulatory and enforcement agencies such as the Department of HHS, Inspector General, U. S. Post Office, and the New York Departments of Education and Health.

 

How to Report Potential Fraud & Abuse
Call our Fraud Hotline at 1-800-378-8024. Our hotline is staffed by an employee of the Special Investigations Unit during regular working hours. During off-hours, you can leave a voice mail message. Callers may remain anonymous.

In addition, you can report possible fraud and/or abuse situations using this convenient on-line form.