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Avoiding Insurance Fraud: Stay Legal!
By Melanie Callahan
Everyone knows that the health insurance industry is continually raising monthly premiums, and many feel this is unjust to you as the consumer. However, the industry has had to fight increasing fraud. The amount of money spent on investigating and prosecuting fraud is then passed on to policyholders. Many people do not understand what fraud entails, though. With reports estimating fraud is a $30 billion to over $100 billion industry per year, the topic should not be taken lightly. Every policyholder should understand what fraud is and its consequences. By doing so, you are more able to recognize and fight fraud. fraud is typically defined as intentionally deceiving, misrepresenting, or concealing information to receive benefits from the insurance company. Essentially this means that you assert that you paid for certain medical procedures or expenses out-of-pocket which you have not actually received, and you are submitting claims to the insurance company to receive reimbursement. Another example of member fraud is to conceal pre-existing conditions or to alter medical documents so that non-policyholders or ineligible members receive medical benefits under your policy. Perhaps your sister does not have insurance and needs medical attention. Having her use your name and policy to cover the expenses is fraud. While you may think that this is a small issue in comparison to your sister receiving treatment, it is actually very serious to your company and industry, and will result in fines and possible imprisonment if your are caught. Not only policyholders
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commit fraud, but providers (physicians, hospitals, etc.) do as well. Since physicians and hospitals bill the insurance company for services they provide for you, they are also receiving reimbursement from the insurance company. When providers commit fraud, they may be billing the insurance company at higher rates for services rendered or they may bill for services you never received. In these cases, you will probably be asked to cooperate in the insurance company's investigation. Another type of fraud that has developed recently targets the policyholder more than the insurance company. Schemes have developed where fake insurance companies or agents sign unsuspecting customers for coverage at surprisingly low premium rates. They often act much like a regular insurance company for the first few months, paying for smaller medical claims like physicians visits. But once you have a more serious medical condition that needs treatment, the insurance company will disappear - along with the money you have been paying in premiums. The rule with fraud is much like that of any other scam: if a deal seems too good to be true, just remember - it probably is. Remember to be honest in your dealings with companies and expect the same in the return from these companies, as well as your health care providers. Stay legal to avoid fines and prison and to continue receiving health insurance coverage.
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