Saturday, June 26, 2010

Health Insurance Fraud and Preexisting Conditions

Lying about preexisting conditions is a form of health insurance fraud

Instances of health insurance fraud committed by patients continue to be a growing concern, costing millions of dollars annually and contributing to the rise in medical insurance premiums.

In addition to these financial burdens placed on both insurance carriers and their customers, these crimes pose safety risks to both the legitimately insured patient and the fraudulent one.

Patient Fraud


Patient fraud is committed by an uninsured individual posing as a legitimately insured person to receive medical treatment.

The most common situation involves friends or relatives loaning their health insurance identification card to someone who does not have coverage for the purpose of receiving services or medication that could not otherwise be afforded.

While many may view such a crime as victimless or actually consider it a noble gesture, severe criminal penalties exist if caught, and these actions only perpetuate skyrocketing medical insurance costs.

Preexisting Conditions


Most health insurance policies have preexisting condition limitations or restrictions; these are designed to protect insurance carriers against policyholders whose only intention is to purchase coverage temporarily to avoid paying for impending treatment.

Most insurance carriers will not pay for services related to preexisting medical conditions for a period of three to six months after the initiation of a new policy, unless the customer has had prior continuous health insurance.

After the expiration of the restriction period, full policy benefits can be paid out for all covered health care services.

Insurance Company Concerns


Health insurance fraud typically occurs when an uninsured person's preexisting medical condition reaches a point where treatment can no longer be delayed nor ignored without resulting in detrimental physical consequences.

Because the uninsured person cannot afford to pay for treatment that may have otherwise prevented, cured or at least stemmed the progression of the condition, the necessary procedures, when fraud is committed, are significantly more involved and expensive than those that would have been utilized previously.

The result is exorbitant treatment invoices that the carrier should not have had to pay and for which there is no income premium that can be used to offset such expenditures.

Medical Safety Concerns


Aside from the monetary problems caused by health insurance fraud, potentially life-threatening situations can occur for both the insured and the person committing fraud.

Borrowing the identity of another to receive medical treatment, especially for serious illnesses and conditions, results in the assumption by hospital staff that patient records are accurate. The uninsured identity thief could be in danger of receiving medication to which he is allergic because the nurses and physicians are unaware of his actual health history.

Conversely, the legitimately covered member could be misdiagnosed in the future due to false treatment records and notes generated by the fraud perpetrator.

Criminal Penalties


Anyone convicted of health insurance fraud, regardless of the manner in which the crime was committed, can be sentenced to 10 years in federal prison, or even more if the fraud results in another person's injury or death.

These penalties apply to situations as blatantly criminal, such as using someone else's medical insurance identification card, as well as intentionally misrepresenting or omitting details of preexisting conditions on an insurance application.

Nearly every state insurance department has a bureau or department whose sole function is to detect, investigate and prosecute insurance fraud.

References


Birmingham Medical News: Patient Fraud on Their Own Doctor's Office
Insurance Fraud: Health Insurance Fraud Data





This article is a Twisted Nonsense Exclusive! (06/26/2010)