Understanding health insurance: What fraud, waste, and abuse mean for your healthcare

Imagine receiving a phone call reminding you about a doctor's appointment you never scheduled or seeing a charge for medical equipment you never received.

Situations like these can be warning signs of fraud and reminders that healthcare resources must be protected. Behind every healthcare dollar is a real person seeking care, filling a prescription, managing a chronic condition, or getting support during a difficult time. and One important way healthcare organizations, providers, and government agencies help protect those resources is by preventing fraud, waste, and abuse, often called

FWA. While those terms may sound technical, the goal is simple: helping ensure healthcare dollars are used as intended and remain available for the people who need care.

Protecting those resources helps ensure they are available when people need them.

WHAT IS FRAUD, WASTE, AND ABUSE?

Although they are often grouped together, fraud, waste, and abuse have different meanings.

Fraud occurs when someone intentionally deceives a healthcare program for financial gain. Examples may include billing services that were never provided, using another person's insurance information, or falsifying records.

In some cases, fraud can involve "phantom" billing schemes in which healthcare programs are charged for products, equipment or services that a member never requested or received. A person may not realize something is wrong until they review an explanation of benefits (EOB), receive a bill for services they never received, or are contacted about care they never used.

Situations like these are one reason healthcare organizations invest in data analysis, investigations, and other tools designed to identify potentially fraudulent activity and protect healthcare resources. Health plans may use member outreach, claims reviews, and other investigative tools to help identify concerns and determine whether services were provided. They also encourage members to review their healthcare statements carefully and report anything that doesn't look right.

Waste involves the inefficient or unnecessary use of healthcare resources. This can include duplicate services, unnecessary testing, or other activities that increase costs without improving care.

Abuse refers to practices that are inconsistent with accepted healthcare standards and can result in unnecessary costs. In some cases, services may be billed incorrectly or provided more often than medically necessary.

Most healthcare providers are dedicated professionals focused on helping patients. Efforts to identify fraud, waste, and abuse are not about creating barriers to care. Rather, they are intended to help ensure healthcare resources are available for legitimate services and the people who depend on them.

WHY THIS MATTERS

For many consumers, fraud, waste, and abuse can seem like hidden issues that occur behind the scenes. Yet they can have real impacts on our healthcare system and your pocketbook.

The National Health Care Anti-Fraud Association estimates that healthcare fraud accounts for at least three percent of all healthcare spending in the United States, resulting in tens of billions of dollars lost each year.

Think of it this way: every dollar lost to fraud, waste, or abuse is a dollar that cannot be used to help someone access care, fill a prescription, receive mental health services, or support other important healthcare needs.

Healthcare fraud is not a victimless crime because the impact extends beyond dollars and cents. Policymakers, healthcare organizations, and enforcement agencies have increased their focus on preventing and addressing fraud in recognition that healthcare resources are meant to support patient care. When those resources are misused, fewer dollars are available for the services and programs people depend on every day.

When healthcare dollars are diverted through fraud, waste, or abuse, fewer resources are available to support patient care, medications, mental health services and other programs people depend on every day.

HOW FRAUD, WASTE, AND ABUSE ARE IDENTIFIED

Health plans use a variety of tools to identify unusual patterns and investigate potentially fraudulent activity. For example, Medica, a nonprofit health company, has a special investigations unit that uses a variety of tools to identify unusual patterns and investigate potentially fraudulent activity.

These efforts may include advanced data analysis, provider reviews, member interviews, site visits, credentialing activities, and collaboration with government agencies and law enforcement partners.

Specialized investigative teams often bring together professionals with backgrounds in healthcare, fraud investigations, coding, behavioral health, analytics, and compliance.

The goal is not only to identify problems after they occur, but also to detect concerns early and strengthen oversight so healthcare dollars can continue supporting legitimate care and services.

WHAT YOU CAN DO

Consumers also play an important role in protecting healthcare resources. A few simple steps can make a difference: Review your healthcare statements. Look at your explanation of benefits (EOB) statements or other healthcare records for services you do not recognize, duplicate charges, or information that appears incorrect. Protect your insurance information. Just as you would protect your credit card or bank account information, be careful when sharing your health insurance information and personal data. Ask questions. If you do not understand a charge, service, or statement, ask your provider or health plan for clarification. Report concerns. If something does not seem right, contact your healthcare provider or health plan. Most organizations have processes in place to review concerns and investigate potential issues.

PROTECTING CARE FOR THE FUTURE

At its core, preventing fraud, waste, and abuse is more than protecting dollars. It is about protecting access to care. It is about helping ensure healthcare resources are available for the child who needs therapy, the parent managing a chronic illness, the senior filling a prescription, or the family seeking support during a difficult time.

When healthcare resources are used responsibly, they can continue to improve lives, strengthen communities, and support the people who count on them every day.

Alicia Reuter is senior vice president, chief legal officer at Medica. Medica is a mission-driven, member-focused non-profit health company headquartered in Minnesota. The company provides health care coverage and related services in the employer, individual, Medicaid and Medicare markets. It operates in Minnesota, Iowa, Missouri, Nebraska, North Dakota, Oklahoma, South Dakota, and Wisconsin.

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