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Insurance fraud

A lot of insurance fraud is committed by doctors who want to increase their earning.

From Wikipedia, the free encyclopedia 

Insurance fraud is any act committed with the intent to obtain a fraudulent outcome from an insurance process. This may occur when a claimant attempts to obtain some benefit or advantage to which they are not otherwise entitled, or when an insurer knowingly denies some benefit that is due. According to the United States Federal Bureau of Investigation the most common schemes include: Premium Diversion, Fee Churning, Asset Diversion, and Workers Compensation Fraud. The perpetrators in these schemes can be both insurance company employees and claimants.[1] False insurance claims are insurance claims filed with the intent to defraud an insurance provider.

Insurance fraud has existed since the beginning of insurance as a commercial enterprise.[2] Fraudulent claims account for a significant portion of all claims received by insurers, and cost billions of dollars annually. Types of insurance fraud are diverse, and occur in all areas of insurance. Insurance crimes also range in severity, from slightly exaggerating claims to deliberately causing accidents or damage. Fraudulent activities affect the lives of innocent people, both directly through accidental or intentional injury or damage, and indirectly as these crimes cause insurance premiums to be higher. Insurance fraud poses a significant problem, and governments and other organizations make efforts to deter such activities.

Causes[edit]

The "chief motive in all insurance crimes is financial profit."[2] Insurance contracts provide both the insured and the insurer with opportunities for exploitation.

According to the Coalition Against Insurance Fraud, the causes vary, but are usually centered on greed, and on holes in the protections against fraud.[3] Often, those who commit insurance fraud view it as a low-risk, lucrative enterprise.

For example, drug dealers who have entered insurance fraud [4] think it's safer and more profitable than working street corners. Compared to those for other crimes, court sentences for insurance fraud can be lenient, reducing the risk of extended punishment. Though insurers try to fight fraud, some will pay suspicious claims anyway; settling such claims is often cheaper than legal action.

Another reason for fraud is over-insurance, when the amount insured is greater than the actual value of the property insured.[2] This condition can be very difficult to avoid, especially since an insurance provider might sometimes encourage it in order to obtain greater profits.[2] This allows fraudsters to make profits by destroying their property because the payment they receive from their insurers is of greater value than the property they destroy. The most common form of insurance fraud is inflating the value of the loss.[citation needed]

Insurance companies are also susceptible to fraud because it's possible for fraudsters to file claims for damages that never occurred.

Hard vs. soft fraud[edit]

Insurance fraud can be classified as either hard fraud or soft fraud.[12]

Hard fraud occurs when someone deliberately plans or invents a loss, such as a collision, auto theft, or fire that is covered by their insurance policy in order to receive payment for damages. Criminal rings are sometimes involved in hard fraud schemes that can steal millions of dollars.[13]

Soft fraud, which is far more common than hard fraud, is sometimes also referred to as opportunistic fraud.[12] This type of fraud consists of policyholders exaggerating otherwise-legitimate claims. For example, when involved in an automotive collision an insured person might claim more damage than actually occurred. Soft fraud can also occur when, while obtaining a new health insurance policy, an individual misreports previous or existing conditions in order to obtain a lower premium on his or her insurance policy.[12]

Health care insurance[edit]

See also: Medicare fraud and Health care fraud

Health insurance fraud is described as an intentional act of deceiving, concealing, or misrepresenting information that results in health care benefits being paid to an individual or group.

Fraud can be committed either by an insured person or by a provider. Member fraud consists of claims on behalf of ineligible members and/or dependents, alterations on enrollment forms, concealing pre-existing conditions, failure to report other coverage, prescription drug fraud, and failure to disclose claims that were a result of a work-related injury.

Provider fraud consists of claims submitted by bogus physicians, billing for services not rendered, billing for higher level of services, diagnosis or treatments that are outside the scope of practice, alterations on claims submissions, and providing services while medical licenses are either suspended or revoked. I

ndependent medical examinations debunk false insurance claims and allow the insurance company or claimant to seek a non-partial medical view for injury-related cases.

According to the Coalition Against Insurance Fraud, health insurance fraud depletes taxpayer-funded programs like Medicare, and may victimize patients in the hands of certain doctors.[15] Some scams involve double-billing by doctors who charge insurers for treatments that never occurred, and surgeons who perform unnecessary surgery.[16]

According to Roger Feldman, Blue Cross Professor of Health Insurance at the University of Minnesota, one of the main reasons that medical fraud is such a prevalent practice is that nearly all of the parties involved find it favorable in some way. Many physicians see it as necessary to provide quality care for their patients. Many patients, although disapproving of the idea of fraud, are sometimes more willing to accept it when it affects their own medical care. Program administrators are often lenient on the issue of insurance fraud, as they want to maximize the services of their providers.[17]

The most common perpetrators of healthcare insurance fraud are health care providers. One reason for this, according to David Hyman, a Professor at the University of Maryland School of Law, is that the historically-prevailing attitude in the medical profession is one of "fidelity to patients".[18] This incentive can lead to fraudulent practices such as billing insurers for treatments that are not covered by the patient's insurance policy. To do this, physicians often bill for a different service, which is covered by the policy, rather than that which they rendered.[19]

Another motivation for insurance fraud is a desire for financial gain. Public healthcare programs such as Medicare and Medicaid are especially conducive to fraudulent activities, as they are often run on a fee-for-service structure.[20] Physicians use several fraudulent techniques to achieve this end. These can include "up-coding" or "upgrading," which involve billing for more expensive treatments than those actually provided; providing, and subsequently billing for, treatments that are not medically necessary; scheduling extra visits for patients; referring patients to other physicians when no further treatment is actually necessary; "phantom billing," or billing for services not rendered; and "ganging," or billing for services to family members or other individuals who are accompanying the patient but who did not personally receive any services.[20]

Perhaps the greatest total dollar amount of fraud is committed by the health insurance companies themselves. There are numerous studies and articles detailing examples of insurance companies intentionally not paying claims and deleting them from their systems,[21] denying and cancelling coverage, and the blatant underpayment to hospitals and physicians beneath what are normal fees for care they provide.[22] Although difficult to obtain the information, this fraud by insurance companies can be estimated by comparing revenues from premium payments and expenditures on health claims.

In response to the increased amount of health care fraud in the United States, Congress, through the Health Insurance Portability and Accountability Act of 1996 (HIPAA), has specifically established health care fraud as a federal criminal offense with punishment of up to ten years of prison in addition to significant financial penalties.

Detecting insurance fraud[edit]

The detection of insurance fraud generally occurs in two steps. The first step is to identify suspicious claims that have a higher possibility of being fraudulent. This can be done by computerized statistical analysis or by referrals from claims adjusters or insurance agents. Additionally, the public can provide tips to insurance companies, law enforcement and other organizations regarding suspected, observed, or admitted insurance fraud perpetrated by other individuals. Regardless of the source, the next step is to refer these claims to investigators for further analysis.

Due to the sheer number of claims submitted each day, it would be far too expensive for insurance companies to have employees check each claim for symptoms of fraud.[40] Instead, many companies use computers and statistical analysis to identify suspicious claims for further investigation.[41] There are two main types of statistical analysis tools used: supervised and unsupervised.[40] In both cases, suspicious claims are identified by comparing data about the claim to expected values. The main difference between the two methods is how the expected values are derived.[40]

In a supervised method, expected values are obtained by analyzing records of both fraudulent and non-fraudulent claims.[40] According to Richard J. Bolton and David B. Hand, both of Imperial College in London, this method has some drawbacks as it requires absolute certainty that those claims analyzed are actually either fraudulent or non-fraudulent, and because it can only be used to detect types of fraud that have been committed and identified before.[40]

Unsupervised methods of statistical detection, on the other hand, involve detecting claims that are abnormal.[40] Both claims adjusters and computers can also be trained to identify "red flags," or symptoms that in the past have often been associated with fraudulent claims.[42] Statistical detection does not prove that claims are fraudulent; it merely identifies suspicious claims that need to be investigated further.[40]

Fraudulent claims can be one of two types. They can be otherwise legitimate claims that are exaggerated or "built up," or they can be false claims in which the damages claimed never actually occurred. Once a built up claim is identified, insurance companies usually try to negotiate the claim down to the appropriate amount.[43] Suspicious claims can also be submitted to "special investigative units", or SIUs, for further investigation. These units generally consist of experienced claims adjusters with special training in investigating fraudulent claims.[44] These investigators look for certain symptoms associated with fraudulent claims, or otherwise look for evidence of falsification of some kind. This evidence can then be used to deny payment of the claims or to prosecute fraudsters if the violation is serious enough.[45]


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Old News ;-)

[May 05, 2017] William Binney - The Government is Profiling You (The NSA is Spying on You)

Very interesting discussion of how the project of mass surveillance of internet traffic started and what were the major challenges. that's probably where the idea of collecting "envelopes" and correlating them to create social network. Similar to what was done in civil War.
The idea to prevent corruption of medical establishment to prevent Medicare fraud is very interesting.
Notable quotes:
"... I suspect that it's hopelessly unlikely for honest people to complete the Police Academy; somewhere early on the good cops are weeded out and cannot complete training unless they compromise their integrity. ..."
"... 500 Years of History Shows that Mass Spying Is Always Aimed at Crushing Dissent It's Never to Protect Us From Bad Guys No matter which government conducts mass surveillance, they also do it to crush dissent, and then give a false rationale for why they're doing it. ..."
"... People are so worried about NSA don't be fooled that private companies are doing the same thing. ..."
"... In communism the people learned quick they were being watched. The reaction was not to go to protest. ..."
"... Just not be productive and work the system and not listen to their crap. this is all that was required to bring them down. watching people, arresting does not do shit for their cause ..."
Apr 20, 2017 | www.youtube.com
Chad 2 years ago

"People who believe in these rights very much are forced into compromising their integrity"

I suspect that it's hopelessly unlikely for honest people to complete the Police Academy; somewhere early on the good cops are weeded out and cannot complete training unless they compromise their integrity.

Agent76 1 year ago (edited)
January 9, 2014

500 Years of History Shows that Mass Spying Is Always Aimed at Crushing Dissent It's Never to Protect Us From Bad Guys No matter which government conducts mass surveillance, they also do it to crush dissent, and then give a false rationale for why they're doing it.

http://www.washingtonsblog.com/2014/01/government-spying-citizens-always-focuses-crushing-dissent-keeping-us-safe.html

Homa Monfared 7 months ago

I am wondering how much damage your spying did to the Foreign Countries, I am wondering how you changed regimes around the world, how many refugees you helped to create around the world.

Don Kantner, 2 weeks ago

People are so worried about NSA don't be fooled that private companies are doing the same thing. Plus, the truth is if the NSA wasn't watching any fool with a computer could potentially cause an worldwide economic crisis.

Bettor in Vegas 1 year ago

In communism the people learned quick they were being watched. The reaction was not to go to protest.

Just not be productive and work the system and not listen to their crap. this is all that was required to bring them down. watching people, arresting does not do shit for their cause......

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