Fraud, waste and abuse in health care

April 17, 2013 Shauna Vistad

An Institute of Medicine report released in September 2012 suggests as much as 30 percent of health care costs can be attributed to fraud, waste or abuse.

Healthcare fraud waste and abuse graphicIn 2009 it is estimated that $765 billion in health care spending was the result of fraud, waste or abuse.

While few are actively involved in health care fraud, they have a large impact.  The FBI regularly reports multi-million dollar health care fraud cases of providers billing for services that are not delivered or providing unnecessary services. In a case of medical identity theft a criminal can pocket an average of $19,000 per incident, according to reports by Javelin Strategy and Research.

The effects of waste and abuse are significant contributors to growing health care costs.  Waste and abuse refer to excessive use of health care services, improper or ineffective use of treatments and actions that are inconsistent with acceptable medical or business practice that result in unnecessary cost.  Frequently these costs can be eliminated without reducing the quality of care received.

Sources of Estimated Excess Health Care Costs 2009(This is the first in a three-part series of blogs about fraud, waste and abuse in the health care system. Tomorrow's blog will focus on what Blue Cross Blue Shield of North Dakotais doing to help control costs and prevent fraud and waste. The third blog will focus on what you can do as a consumer to help control costs).