Health Insurance Fraud Accounted for 5% of U.S. Health Care Expenditures in 2003, Report Finds

An estimated $85 billion, or 5%, of the $1.7 trillion in U.S. health care spending in 2003 was lost to health insurance fraud, according to a report released Tuesday by the BlueCross BlueShield Association, the Atlanta Journal-Constitution reports. BCBSA officials released the report at a news conference marking National Fraud Awareness Week (Maltin, Atlanta Journal-Constitution, 7/13). The report found that health insurance fraud cost BCBSA plans -- which insure more than 88 million U.S. residents -- $162 million in lost revenue in 2003, up 66% from $98 million in 2002 (Dixon, Reuters News, 7/13). The most common types of fraud include performing unnecessary medical procedures, improperly prescribing drugs, billing for a more expensive service than that performed and impersonating a health professional (Atlanta Journal-Constitution, 7/13).

Byron Hollis, BCBSA's anti-fraud director, said that some doctors will perform medically unnecessary cosmetic procedures disguised as a necessary surgery, adding, "They'll call a tummy tuck an appendectomy." John Morris, manager of special investigations for Blue Cross and Blue Shield of Florida, said that some physicians use "rent-a-patient" schemes in which the physicians recruit patients to undergo procedures they do not need and then share the reimbursement with them (Reuters, 7/13). "Every dollar stolen from the health care delivery system by fraud perpetrators is a dollar not available for necessary life-saving treatments, drugs, research or emergency services," Hollis said (Atlanta Journal-Constitution, 7/13). In addition, BCBSA officials said that health insurance fraud is causing health premiums to rise even higher, Reuters reports. BCBSA officials said that the organization and its 41 companies have increased anti-fraud staff by 30% and are working with the Federal Bureau of Investigation to track health insurance fraud (Reuters, 7/13). Tim Delaney, supervisor of the FBI health care fraud unit, said that the agency has 500 agents working on 2,000 health fraud cases open at any given time because "that's where the money is" (CongressDaily, 7/13).