Fraud & Abuse In U.S Healthcare System

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Fraud & abuse in U.S. healthcare system


In this study we try to explore the concept of “fraud and abuse in healthcare system in U.S” in a holistic context. The main focus of the research is on “fraud and abuse in healthcare system in U.S” and what are the problems that this major issue is creating and most importantly how to combat this issue. The research also analyzes many aspects and different types of fraud and abuses in healthcare system and tries to gauge its effect on credibility of U.S healthcare system (Freeh, 1995).


Introduction 4 (Freeh, 1995).

Literature Review 4-5

Healthcare fraud defined 5-6

Types of healthcare fraud 6-7

Assessing current healthcare fraud detecting techniques 7-10

Suggested healthcare fraud detection techniques 10-13

Conclusion 13

Fraud & abuse in U.S healthcare system


Healthcare and wellness of an individual is his or her basic right. Everyone, no matter to which culture, class and race he or she belongs to deserves a proper system that provide healthcare benefits. In U.S, healthcare industry is huge. It is the industry that constitutes 15% of the overall economy of U.S and is considered as one of the largest and best healthcare industry all over the world. When any industry operates on such a huge level and involves more of the private entities rather than the government, it is likely to get affected from malpractices of different sorts of frauds and abuses. This paper discusses fraud and abuses in U.S healthcare industry its impact on overall industry and how to deal with this issue (Sparrow, 1994).

Literature review

Fraud in healthcare system is increasing and it is because it is the industry in U.S that spends more money in health and care than any other industry. Fraud and healthcare insurance go hand in hand since its inception. But, in 1980's fraud in healthcare industry really came in the mainstream. According to Attorney General Janet Reno, in 1993, fraud in healthcare sector was regarded as the second major crime in U.S. In 1995, it was revealed by FBI that drug dealers are moving towards healthcare fraud. “Healthcare fraud was easier, safer and less risky for drug dealers and less chances of detecting fraud in healthcare than drugs dealing captivate drugs dealer to move towards healthcare system” (Freeh, 1995) (Sparrow, 1994).

In 1997, it was reported by New York Times that New York and New Jersey's mafia gave up their activities of extortion and bid-rigging rackets to participate in fraud activities launched by health insurance companies.

In 2003, one of the America's largest chains of hospitals Columbia HCA had to pay 1.7 billions of dollars in settlement with U.S department of justice.

In 2008, a couple in Florida were caught because they submitted wrong claim of a bill of 420 million dollars for medical equipment.

Healthcare fraud

We have heard about fraud in partnership, fraud in accounting and fraud in banking industry. Fraud in all these fields is very common but now even the healthcare industry is not safe from it. Fraud has accessed healthcare ...
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