Pursuant to a congressional request, GAO examined the: (1) nature of fraud and abuse associated with the health care industry; and (2) problems insurers have in detecting and pursuing such fraud and abuse.

GAO found that: (1) vulnerabilities within the health insurance system allow unscrupulous providers to cheat health insurance companies and programs out of an estimated 10 percent of total health care spending each year; (2) health insurance fraud and abuse practices include overcharging for services, charging for services not rendered, accepting bribes for referring patients, and rendering inappropriate or unnecessary services; (3) health care fraud has expanded beyond single provider fraud to organized activity affecting both government and private insurance programs; (4) insurers have problems detecting and pursuing fraud and abuse because of the multiple activities that take place during claims processing, privacy concerns that limit collaboration among industry members, and the lack of consensus concerning the appropriate regulation of providers and financial arrangements; (5) the development of new, unlicensed medical facilities can impede insurers' ability to trace the source of fraudulent billings and hold them accountable; (6) the appropriate regulation of new health care facilities is complicated by physicians' and other health care providers' financial interest in facilities; and (7) if public and private insurers' efforts were more coordinated, the attack on health care fraud and abuse would be more beneficial.

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