Protecting Yourself from Insurance Fraud: What You Need to Know

It's common knowledge that the cost of health insurance is going up every month, and many people believe that this is unfair to you. In spite of this, the health insurance sector has been forced to combat rising levels of health insurance fraud. Policyholders end up footing the bill for the cost of investigating and prosecuting fraud. 

However, many people are unaware of what constitutes health insurance fraud. Health insurance fraud is a serious issue that costs the industry between $30 billion and over $100 billion annually, according to reports. Health insurance policyholders should be aware of what constitutes health insurance fraud and its repercussions. You will be better able to spot fraudulent activity and prevent it if you do this.

In order to receive benefits from a health insurance provider, one must deliberately misrepresent or conceal information. This essentially means that you are submitting claims to the insurance company in which you claim to have paid for medical procedures or expenses that you have not actually received. For non-policyholders or ineligible members to receive medical benefits under your policy, another form of member fraud is to conceal pre-existing conditions or to alter medical documents. 

Maybe your sis needs medical help but she can't afford insurance. It is health insurance fraud to let her use your name and policy to pay for the treatment. In your mind, this may be a minor problem in comparison to getting your sister the care she needs, but if you get caught, you could face fines and even jail time from your health insurance provider and the industry at large.

Fraud is committed not only by policyholders but also by providers (doctors, hospitals, etc.). Insurance companies pay for the services provided to you by doctors and hospitals because they have been billed for those services. Provider fraud can take the form of overbilling the insurance company or billing for services that were never provided. Your cooperation with the insurance firm's investigation is likely to be requested in such situations.

Another form of health insurance fraud that has emerged in recent years cheats policyholders rather than insurers directly. False insurance agencies or agents have developed schemes to enroll naive customers in policies with surprisingly low premiums. In the first few months, they function a lot like a standard insurance company, covering basic medical expenses like doctor's visits. However, once you develop a more serious medical condition requiring treatment, the insurance company will vanish, taking your premium payments with them.

Health insurance fraud follows the same rule as any other type of con: if something sounds too good to be true, it probably is. Always remember to be forthright and honest when interacting with your health insurance company and your healthcare providers. Maintain your legal status so you can keep your health insurance and avoid jail time.

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