White Paper: Payment Integrity: New Perspectives On, And Approaches To, Mastering The Challenge Of Healthcare Fraud, Abuse And Waste

The problem of healthcare fraud and abuse is a serious and ongoing one. Health insurance fraud includes billing for services, procedures, or supplies never provided; misrepresentation of what was provided, or by whom; and the providing of unnecessary services. The National Association of Insurance Commissioners (NAIC) defines health insurance fraud as "an act or omission committed by a person who, knowingly and with intent to defraud, commits, or conceals any material information."

Abuse is a broader term, encompassing activities ranging from dishonest manipulation of billing protocols, such as up-coding and miscoding, to deliberately excessive or inappropriate provision of services. One definition of abuse, as expressed by New York's state government (NYCRR Title 10, Chapter II, Part 98) is "any practice that is inconsistent with sound fiscal, business or medical practices and results in unnecessary cost to the state or federal government or managed care organization (MCO), or in reimbursement for services that are not medically necessary or that fail to meet professionally recognized standards for healthcare in a managed care setting, committed by a MCO, contractor, subcontractor or provider."