Health Insurance: Remedies Needed to Reduce Losses From Fraud and Abuse

GAO discussed health care fraud and abuse and the need for better remedies and more resources to combat the problem. GAO noted that: (1) fraud and abuse encompassed a wide range of improper billing practices by physicians, medical equipment suppliers, and other suppliers that add 10 percent to U.S. health care costs; (2) whether or not health care insurers pursued a fraudulent act depended on the size of the financial loss incurred and the quality of evidence establishing intent; (3) health care fraud has expanded to organized activities affecting health care programs in both the government and private sectors; (4) obstacles that prevented insurers' efforts to detect fraud and abuse included independent health insurers, legal constraints on coordination of detection and investigation efforts, the high cost of criminal prosecution and civil pursuit of fraud, and limited resources for insurers and law enforcement agencies; (5) overcoming obstacles will require insurers, law enforcement agents, regulators, and providers to collaborate systematically on problems involving fraud and abuse; and (6) without adequate resources, investigation and pursuit of health care fraud is not possible.