Larry’s Laws of Larceny- Law 20: Fraud in a Health Plan is More Common Than you Think

Larry Beebe, CPA

Health care spending in the United States is massive. In 2014, health care spending in this country was estimated at $2.7 trillion or approximately 17% of Gross National Product. Fraud is estimates to consume $272 billion, which would be 10% of health care providers. Health care fraud is committed by service providers, insurance companies, and my patients.

I teach at the New Trustees Institute of the International Foundation. I ask the trustees, by a show of hands, how many of them are trustees of health and welfare plans. About 70% of the hands go up. I ask them to keep their hands up and now lower your hand if there is no fraud in your health and welfare plans. A number of the hands go down. All of the hands should have stayed up. Every heads and welfare plan has fraud somewhere. As trustees, employees, and service providers of health and welfare plans, we must all be diligent in our responsibility to search for and to detect fraud.

Comprehensive health claims audits should be conducted periodically by personnel who have training and knowledge in the area.

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