Fraud, Waste and Abuse
In 2007, $2.26 trillion was spent on health care and more than 4 billion health insurance claims were processed in the United States. The National Health Care Anti-Fraud Association (NHCAA) estimates conservatively that 3% of all health care spending or $68 billion is lost to health care fraud. According to the Federal Bureau of Investigation (Financial Crimes Report to the Public, Fiscal Year 2007) the loss due to health care fraud is as high as 10% of our nation’s annual health care expenditure or a staggering $226 billion each year.

According to the Government Accounting Office (GAO), 10% of all healthcare spending nationally has been lost to fraud, waste, and abuse. These alarming issues of the health system cost taxpayers millions of dollars each year. Every dollar defrauded from the system is one less dollar to help those persons in need.

Due to the rising cost of healthcare and diminishing government resources, public sector health programs have initiated new quality control measures designed to increase cost savings while ensuring program integrity through the elimination of recipient and provider fraud and abuse.

Fraud, waste, and abuse definitions:

• Fraud is an intentional act to deceive or misrepresent by an individual that result in unauthorized benefit to the individual or to some other person.
• Abuse refers to actions inconsistent with acceptable business, fiscal, or medical practices. Abuse results in unnecessary costs to the program through reimbursement for medically unnecessary services, services that do not meet acceptable healthcare standards, and unacceptable beneficiary practices.
• Waste refers to intentional or unintentional over-utilization or misuse of resources that is not necessarily illegal.

Given the complexity of the health care supply chain and the potential vulnerabilities that exist, there is a need for every federal and state agency that is responsible for management of a health benefits program to have oversight and program integrity initiatives that addresses potential vulnerabilities along all points in the health care supply chain. Program Integrity efforts include: prevention, detection, and correction and recovery.