The U.S. healthcare industry loses billions every year due to fraud, abuse, and administrative waste. Here are five startling facts on healthcare fraud.
1. $225 billion of the $750 billion in healthcare spending was wasted on fraud, unnecessary services, and excessive administrative costs.
According to researchers, in 2009 roughly 30 percent of the total healthcare spend was wasted on fraud and abuse and other unnecessary spending.
That was 10 years ago. Current numbers calculate the U.S. healthcare spend at $3.4 trillion, and the 30 percent wasted spending hasn’t changed. Nearly $1 trillion annually is wasted in the healthcare industry on fraud, repeated or unnecessary services, and excessive administrative costs.
Broken down into an annual increase, the total healthcare spend has increased on average roughly $265 billion each year.
2. Organized healthcare scammers use authentic patient information to fabricate claims for procedures or services that were never performed.
It’s true. A small percentage of crooked healthcare practitioners ruins the integrity of the industry as a whole. There are entities that have found ways to cheat the system, and here are a few ways they do it:
- Performing medically unnecessary procedures or testing
- Billing for more expensive services than what are actually needed or performed
- Billing for services that were altogether not performed
- Falsifying diagnoses in order to justify further testing or billable procedures
- Receiving kickbacks from other entities to gain additional patient referrals
3. In a three-year period, the federal government spent $650 million on healthcare fraud and abuse investigations.
In its three-year effort to recover fraudulent overbilling to Medicare, Health and Human Services (HHS) recovered nearly $2.6 billion in taxpayer money in 2017.
They recovered these funds through teams comprised of lawyers, evaluators, prosecutors, and law enforcement agents to uncover healthcare organizations, entities, and practitioners participating in some of the following activities:
- Operating “pill mills” inside medical practices
- Submitting illegitimate claims for ambulance transportation services
- Submitting false claims for therapy (occupational or physical) services
- Misrepresenting or fabricating the capabilities of their EHR systems to their patients or customers
4. Nearly 60 to 70 percent of all provider claims submitted for payment have incorrect or incomplete data, which leads to audits and potential investigations of fraud and abuse.
Due to poor workflows, unintelligent EHR reporting systems, and subpar administrative operations, medical claims and Rx’s are riddled with mistakes.
Without proper technology or massive organizations monitoring and regulating claim submissions and documentation at the time of the encounter, these incorrect claims will continue to drain resources and administrative time that could be spent on solving for better patient care. Rather, more time is allotted to trying to solve these inefficiencies that lead to ripple effects in poor care and attention for the patient.
5. In 2018, more than 2,700 entities and individuals were excluded from participation in Federal healthcare programs due to fraudulent or abusive actions toward Health and Human Services.
The Office of the Inspector General (OIG) leads the charge in finding and investigating healthcare fraud and abuse cases.
In 2018, OIG “brought criminal actions against 764 individuals or organizations engaging in crimes against HHS programs and the beneficiaries they serve,” according to its Semiannual Report to Congress published at the end of 2018.
In addition, OIG took civil action against another 813 entities or individuals, and June 2018 marked their largest successful operation in which they arrested nearly 600 individuals involved in fraudulent activities including illegally prescribed and distributed opioids.
Looking to a Brighter Future of Reduced Fraud and Patient Participation
Last March at HIMSS 2018, CMS Administrator Seema Verma announced the introduction of a new government initiative, MyHealthEData, to help put patients back at the center of the healthcare delivery system.
The government along with innovative health tech companies are looking to bring technology solutions to the table that will not only help reduce fraud and abuse of the healthcare system, but also empower patients and put them back in the driver’s seat when it comes to accessing their own health data.
What frustrations do you have with the healthcare industry? What problems would you solve with the right technology? Let us know in the comments below!