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Fraud Detection and Health Care Reform

on 07 November, 2013

The purpose of health care reform is to rebuild the American health care system. The elimination and prevention of fraud, waste and abuse (FWA) in medical programs, such as Medicare and Medicaid is an essential component of improving the medical industry. By implementing the use of data systems with accurate detection capabilities and also strongly enforcing FWA laws, there is a strong possibility of returning billions of dollars to the health care system.

According to The Economic Case for Health Care Reform written by the Executive Office of the President’s Council of Economic Advisors, “Anecdotal evidence suggests that there is significant fraud and abuse in the Medicare and Medicaid programs, including the submission of bills for services not rendered, billing individually for services that should have been paid for as a single payment, ‘upcoding’ of services to receive a higher payment, submitting bills for noncovered services, and providing services that are not medically necessary.” Detecting these behaviors is the first step in exposing cases of fraud, returning fraudulent funds and refining American medical practices. Data analysis devices designed to recognize behavior consistent with fraud are becoming important tools in saving money and catching medical professionals engaging in FWA practice.

Several legal actions have already taken place in the prevention and detection of FWA. The Fraud Enforcement and Recovery Act of 2009 (FERA) heightened the government’s enforcement of laws regarding FWA. FERA also increased funding for fraud detection. The Anti-Kickback Statute enforces the criminal punishment of FWA practice. Also, the Health Insurance Portability and Accountability Act (HIPAA) raised the punishment standards, such as imprisonment durations, for FWA Criminals. Many other laws and regulations have been put into place in recent years to integrate FWA control into health care reform. 

The latest FWA awareness and action plans will most likely bring positive effects to the U.S. health care system, both economically and ethically. Detecting, eliminating and preventing FWA behavior is a critical factor in successful health care reform in the United States.