Eradicating fraud and abuse of company health benefits

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Employers who provide their employees health or disability benefits out of their own funds are at risk of overspending on unnecessary healthcare and losing a significant amount of money to company health benefit fraud and abuse.

Employee health benefits fraud occurs when an employee knowingly and intentionally misrepresents a fact he or she knows to be false, for the purpose of obtaining healthcare benefits he or she is not entitled to. One example is an employee filing a claim for job-related injuries that did not occur. Employers and managers can also be accused of fraud if they under-report payroll, or classify ineligible workers for lower insurance premiums.

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Employee health benefits fraud affects not only employers: It also results in higher premiums for employees, as well as out-of-pocket expenses, reduced coverage, and inaccurate medical records.

To minimize fraud in company health benefits plans, employers should perform a number of steps. These include:

  • Training their team to recognize benefits fraud and its four common areas: billing for services not rendered, misrepresentation of services provided, sale of durable goods, and providing unnecessary services
  • Empowering plan members to report benefits fraud by providing a phone number or person to contact in case of suspected fraud
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It is also vital to implement a system that detects and prevents transactional errors and allows users to ensure payment accuracy, confirm that financial reports are complete and correct, reduce costs in case of payments errors, and police upcoding and other fraudulent activity.

Vitality, a VitalSpring Technologies, Inc., an enterprise technology company , analyzes all healthcare transactions to identify the warning signs of health benefits fraud and abuse, such as ineligible members, overcharges, and uncovered services. To learn more about it and other hosted software solutions, subscribe to this blog.

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4 thoughts on “Eradicating fraud and abuse of company health benefits

  1. This kind of fraud can cause employers to lose lots of money. They really have to be careful in approving claims.

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