Healthcare Fraud: Auditing and Detection Guide, 2nd Edition

What Is Healthcare Fraud?

The Merriam-Webster Dictionary of Law defines fraud as:

any act, expression, omission, or concealment calculated to deceive another to his or her disadvantage; specifically: a misrepresentation or concealment with reference to some fact material to a transaction that is made with knowledge of its falsity or in reckless disregard of its truth or falsity and with the intent to deceive another and that is reasonably relied on by the other who is injured thereby.

The legal elements of fraud, according to this definition, are:

• Misrepresentation of a material fact
• Knowledge of the falsity of the misrepresentation or ignorance of its truth
• Intent
• A victim acting on the misrepresentation
• Damage to the victim

Definitions of healthcare fraud contain similar elements. The CMS website, for example, defines fraud as the:

Intentional deception or misrepresentation that an individual knows, or should know, to be false, or does not believe to be true, and makes, knowing the deception could result in some unauthorized benefit to himself or some other person(s).

The Health Insurance Portability and Accountability Act (HIPAA) of 1996 is more specific, defining the term federal health care offense as “a violation of, or a criminal conspiracy to violate” specific provisions of the U.S. Code, “if the violation or conspiracy relates to a health care benefit program” 18 U.S.C. § 24(a).

The statute next defines a health care benefit program as “any public or private plan or ...