Health Insurance:

More Resources Needed to Combat Fraud and Abuse

T-HRD-92-49: Published: Jul 28, 1992. Publicly Released: Jul 28, 1992.

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GAO discussed health insurance fraud and abuse, focusing on the need for greater investigative and prosecutorial resources to combat the problems. GAO noted that: (1) health industry officials estimate that fraud and abuse contribute to 10 percent of U.S. health care's current $700 billion in costs; (2) the health insurance system allows unscrupulous health care providers to cheat health insurance companies and programs, primarily because health insurers operate independently and are constrained by legal and administrative limitations from collaborating on efforts to confront fraudulent providers; (3) criminal prosecution and civil pursuit has been shown to have little chance of recovering financial losses because the pursuit of fraud is expensive and slow; (4) to detect and pursue health care fraud effectively, insurance and law enforcement resources are not sufficient; (5) investigative and prosecutorial resources and priorities vary by jurisdiction, often constraining state and federal prosecutors from pursuing health care cases involving small dollar amounts; (6) the Department of Justice and the Department of Health and Human Services Office of the Inspector General have significant shortages in investigative resources to pursue health care fraud; and (7) Medicare contractors reported receiving about 18 million calls, many of them complaints of fraud or abuse that were not referred to contractor investigative staff.

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