Healthcare Fraud and Abuse – Health System Example

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"Healthcare Fraud and Abuse"  is a great example of a paper on the health system. In the United States, healthcare fraud and abuse have become a major concern for the government and for civilian patients. Several kinds of frauds are being practiced which have been identified and proposals for possible solutions have been laid. “ On May 20th, 2009, the Fraud Enforcement and Recovery Act of 2009 was signed into law” (Rhoad and Fornataro). This reflects the government’ s involvement and efforts to satisfy this pressing matter.                       One of the major forms of fraud being observed is committed through financial mismanagement.

The current healthcare system involves the services of the government-managed health insurance system and/or private health insurance systems. With the ever-increasing costs of healthcare providence, fraud and over-charging of healthcare insurance and costs have developed into a serious problem. Due to the divided nature of processing and insurance claims, the supervision and detection of such crimes are not easy. Additionally, the under-cover workings of the insurance agencies also make it difficult to identify the fraud. Several propositions have been made to develop a model for automatic detection of fraudulent and abusive cases – some models are backed by real-life experiences (Yang and Hwang).

Manual detection models have failed miserably. Even though efforts and implementations are being made to control this kind of fraud, the results of such efforts are yet to be determined. The severity of its nature can be evaluated by the fact that such behavior not only robs the patients of their valuable resources but also impact the Federal Reserve by charging unjustified amounts in its name.                       Secondly, another cause of concern for medical facilities seeker is the issue of information security and privacy.

Hospitals are required to keep records of all its patients for follow-ups and emergency calls. At times, this information consists of the patient’ s personal data. It is implied that the hospital is required to safeguard this information; however, evidence reveals that such protection is not provided to patients’ vital information. Breach of this protection has resulted in the cases of claims being launched by numerous affected. “ The adoption of digital patient records, increased regulation, provider consolidation and the increasing need for information exchange between patients, providers and payers, all points towards the need for better information security” (Apparel and Johnson).

Efforts are being made to strengthen the healthcare information systems in order to provide better information security.                       Another type of fraud being committed by healthcare agencies is the provision of low-quality services and medical care. Such fraud cannot be adequately compensated for by the hospital management and hence poses to be the biggest threat and concern for all. Even if settlements are reached through law enforcement agencies, the affected patient is generally under-compensated for the damage incurred in the process (Krause).

For the severity of its nature, the penalties for such an act may include exclusion, debarment, loss of professional practice license, or financial penalties (Bucy). All of these have drastic impacts on the hospital practice and healthcare providence and is considered as the harshest remedy for incompliance with government regulations.                       Healthcare and Medical services is a sensitive field of practice since it is directly related to life and death. Fraud and abuse in this profession can inflict dire consequences on the affected individuals and therefore extremely strict regulations need to be formulated to prevent lawlessness in this field.

Several loopholes in the healthcare providence system have been tapped while several others await attention. These issues should be solved on a priority basis.


Bucy, Pamela H. Healthcare Fraud: Enforcement and Compliance. Law Journal Press, 1996. Print.

Yang, Wan-Shiou and Hwang, San-Yih. “A Process Mining Framework for the Detection of Healthcare Fraud and Abuse”. Expert Systems with Applications 31(1) (2006). 56-68. Web. 17 Jan. 2012.

Rhoad, Robert T. and Fornataro, Matthew T. “A Gathering Storm: The New False Claims Act Amendments And Their Impact On Healthcare Fraud Enforcement”. The Health Lawyer 21(6) (2009). 14. Web. 17 Jan. 2012.

Appari, Ajit and Johnson, M. Eric. “Information Security and privacy in healthcare: current state of research”. International Journal of Internet and Enterprise Management 6(4) (2010). 279-314. Web. 17 Jan. 2012.

Krause, Joan H. “Healthcare Fraud and Quality of Care: A Patient-Centered Approach”. Journal of Health Law 37(2) (2004). 161-195. Web. 17 Jan. 2012.

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