In Michigan, health insurance fraud is a felony offense punishable by up to four years in prison and $50,0000 in fines. Health insurance fraud involves the policyholder, practitioner or another party providing misleading, false or fraudulent information to obtain unauthorized benefits from the insurer. The Fraud Investigation Unit is a criminal agency operating within Michigan’s Department of Insurance and Financial Services tasked with preventing criminal and fraudulent activities in their financial services markets.
Insurance fraud by policyholders
Policyholders commit insurance fraud by letting someone else use their identity and insurance information for obtaining services from a health care provider. Letting family members use your insurance card for medical treatment is a form of insurance fraud. Another common form of health insurance fraud is when policyholders use their benefits to help pay for medications that were not prescribed by their physician. Stealing prescription forms and obtaining medications by forging the physician’s signature is also health insurance fraud.
Insurance fraud by health providers
When health insurance fraud is committed by the provider, white-collar crimes are often involved as well. Providers engaging in health care fraud may charge for procedures, supplies or services never rendered. Providers committing fraud may charge for more expensive services than what was provided. Performing unnecessary services for financial gain is also considered fraud. Fraudulent providers may also misrepresent uncovered treatments as a medical necessity.
Health care fraud may also involve providers falsifying a diagnosis to justify tests or medical procedures. Health insurance fraud schemes involving overbilling typically rob consumers of critical services and benefits. The scheme may include billing a single procedure as if it were multiple procedures. Charging more for co-pay than the amount set by the insurer is also unlawful. Offering compensation for accident-victim referrals is one other conventional form of health insurance fraud.