Fraud in Healthcare

Brief Background

The healthcare sector has continuously evolved to adapt to the changing business and technological environment. Despite this evolution, fraud has remained constant in the sector throughout those years of evolution (Clarke & Nwosu, 2013). Fraud is committed by practitioners, physicians, insurers, and other health service providers. The crime which is classified as white-collar entails filing of false claims to make profits. Some of the most common fraudulent schemes include practitioner and provider schemes such as obtaining unneeded prescription medicines to sell them and make money, billing for services that were never rendered, exaggerating the price of health services provided, employing unlicensed staff, and forgery and many other forms of fraudulent schemes among others.  Patients can also commit fraud through actions such as providing false personal details when applying for health services and programs, selling medicine prescribed to them to other people, utilizing benefits for purposes that are not health-related, or using the insurance card of another individual (Sarwar & Nicolaou, 2013).  When a healthcare fraud is committed the costs incurred are transferred to the customers. For instance, when a healthcare provider decides to overcharge his services then patients are forced to pay a higher price for these services.

According to past findings for every dollar spent in healthcare 10 cents go towards payment of fraud in the healthcare sector. The department of health allocates a huge sum of money yearly for spending in the healthcare sector which amounts to $1 trillion per year which implies that more than $10 billion are lost to healthcare fraud (DoJ, 2020).  Additionally, healthcare providers or members who are found to be guilty of being involved in fraud face serious punishments including fines, incarceration, and losing licenses at times. The purpose of this research is to explore healthcare frauds committed particularly by practitioners, as well as their impact on the practitioners and the healthcare sector as a whole.

When a health care fraud is perpetrated, as stated earlier, the health care provider passes the costs to its customers.  Statics show that every 10 cents which are spent on health care go towards payment of fraudulent health care claims (Clarke & Nwosu, 2013). There is congressional legislation that requires health care insurance to pay a legitimate claim within a given thirty days (, 2020).  The Federal Bureau of Investigation has the responsibility of investigating any health care fraud (FBI website, 2020). The FBI however, rarely has adequate tike of investigating before an insurer pays.

There are different consequences of health care fraud, which include jail terms and payment of fines.  A health care provider is also likely to possibly lose the right to practice on insurance, such as Medicare insurance, if found to have committed such an offense. Some of the frauds that many people have been indicted for include health insurance frauds, snake oil marketing, and even medical fraud. Many people in the United States are quality of such scams, where they use programs such as the Medicare programs and other various programs to defraud people, who seek their care at the institutions (Pozgar, 2013).  The offenders have been exploring different and new ways of breaking the law. Any damages from fraud can be recovered through the use of the False Claims Act.

There are diverse ways of fraud health schemes. They include Billing for services not rendered. It is common for health providers to fraud people though making false claims to the government health plans. During the early stages of a health care fraud examination or investigation, the reported dates of service listed on the claim forms and then look for any documentary evidence that the patients were at the facility on those dates. Other methods of fading include Waiving of deductibles and co-payments, Waiving of deductibles and co-payments, Overutilization of services, false or unnecessary issuance of prescription drugs, and Misrepresenting provider of service, Misrepresenting dates of services and Billing for a non-covered service as a covered service, among others (Clarke & Nwosu, 2013).  Health fraud can be avoided through different ways by both the providers and persons seeking care. Any person accessing any given medical cover has to be keen one understanding his/her insurance program. There is a need for the relevant agencies to ensure that they are well conversant with the diverse types of fraud cases.  This requires an in-depth study that expounds on the issue of fraud in the health care and measures that can help tackle the issue.


Problem Statement

A 2013 study by Johns Hopkins Bloomberg School of Public Health reveals that healthcare fraudsters deliver care which can severely harm patients revealed that over 6,700 premature deaths were a result of fraud and abuse.  The study conducted by further illustrated that 14%-17% of patients treated by fraud practitioners and physicians are likely to die compared to those treated by law-abiding peers (Clarke & Nwosu, 2013). Most of the vulnerable population include people from minority communities, and low –income population who in most cases are unable to access quality and affordable healthcare.


Research Purpose

Fraud in the healthcare sector has remained constant over the years with no sustainable solutions being implemented to deal with its impact.  Some of the reasons why fraud has failed to be detected include ignorance by managers and leaders of the healthcare sectors as well as increased greed among practitioners and physicians. Unfortunately, as mentioned above healthcare fraud has been attributed to various negative effects including increased premature deaths and wastage of money which has to be paid for by customers (Clarke & Nwosu, 2013). For instance, the stealing of drugs results in the inadequacy of the drugs meant for patients. The facility is forced to increase its expenditure to purchase more drugs that are estimated to meet the needs of the patients. The costs of tense drugs are further transferred to the members which affects their budget for health services.

Pozgar (2013) argues that fraud in the healthcare program is in most cases executed knowingly and voluntarily. Each year $1 trillion is spent by the US federal government to fund the healthcare sector. While the proportion lost to fraud and abuse has not been systematically measured, past researchers argue that the impact is very high.  The Department of Health and Human Services argues that 10% of the annual spending which amounts to $100 billion is estimated to be lost to healthcare fraud and abuse. This shows that if fraud is not identified, pointed out, and minimized in the healthcare sector, more losses in terms of life and profits are going to be continuously lost in the healthcare sector (DoJ, 2020). It is therefore very important to point out some of the most common fraud practices as well as their impact on the industry (Pozgar, 2013). About the subject study, the research aims to identify and deeply explore the existing healthcare frauds, their main causes, and their impact on the healthcare sector.

A combined qualitative and quantitative methodology will be applied in this research to collect the necessary data needed to draw the accurate conclusion of the study.  Data will be drawn from secondary and primary sources before being compared.  Data collected has to be relevant and therefore sources have to date back less than ten years ago to ensure validity and relevance of data used for the research (DoJ, 2020). The collected data will further be compared and analyzed systematically to help the researcher deeply explore and explain the issue of fraud. Ethical codes of research will be followed during the process of data collection as well as data analysis.

Research Question

Quantitative Research Question

How many fraud cases have been reported in the health care sector in the United States?

Qualitative Research Question

What are the major causes and impacts of the heath care fraud, and what best ways can be used to address the issue?

Concepts, Constructs, and Variables for the Quantitative Research Question


There is rise in the number of cases of fraud in the health care influenced   different factors.


There so an increasing level of fraud in health care in the country.


A certain percentage of cash spent on health care go towards payment of fraudulent health care claims.

Proposition Statements

Normative statement:

 Fraud in the health care has been on the rise, a factor that ought to be comprehensively researched and addressed.

 General/Vague Proposition:

 Fraud is a common offense that takes place in the health sector of the United States.

Testable Proposition

 The issue of fraud in the health care is one of the most challenging issue in the sector.



Literature Search Strategy



Department of Justice (2020). 976. Health Care Fraud—Generally. The US department of Justice (DoJ).

FBI website. (2020). Health Care Fraud. WHAT WE INVESTIGATE. Retrieved from


Sarwar, U., & Nicolaou, M. (2013). Fraud and deceit in medical research. Journal of research in medical sciences . Journal of Isfahan University of Medical Sciences, 17(11), 1077-1081.

Clarke, A. M., & Nwosu, F. O. (2013). Fraud and Abuse in Healthcare Delivery Process. Journal of Functional Education, 3(7), 42-61.

Gray literature

Department of Justice. (2020). 976. Health Care Fraud—Generally. The US department of Justice (DoJ).








Single terms Term combinations using Booleans Phrases
Fraud health care Fraud in health care
Health commit fraud The department of health
Costs , policies health care insurance  




Criteria for selecting articles


Categories Search Parameters
Time frame 5 years back


Population of interest  Experienced persons in  the field of health care and  crime investigations
Geography  Mostly  in the United States , and across the world
Peer-reviewed articles Yes
Full articles and/or abstracts  Full articles



Type of study  Both quantitative and qualitative


Annotated Bibliographies

Quantitative Research Study

Achary, A., Pandey, A. K., Mago, S., Yadav, J., & Bansal, S. (2019). Role of Whistle Blowers in Health Care Industry: An Empirical Study. Indian Journal of Public Health Research & Development10(1), 142-146.

This is a research paper that expounds on the malpractices in health care in the 21st century. It also explains the role of whistleblowers who provide relevant information to the authorities regarding fraud cases.  The article explores the motives behind the problem existing in the health industry. The research paper also illustrates how the whistleblower policy can help in combating crime.

Qualitative Research Study

Grant, T. M. (2017). Leadership Strategies for Combating Medicare Fraud.

The research paper is a qualitative study that expounds on fraud in health care and the role of leadership in combatting these crimes.  The Medicare program is focused on where the pear seeks a way of ensuring that patients in the country are protected against health fraud.  The author proposes laws and control strategies that could help in combating healthcare fraud.





Achary, A., Pandey, A. K., Mago, S., Yadav, J., & Bansal, S. (2019). Role of Whistle Blowers in Health Care Industry: An Empirical Study. Indian Journal of Public Health Research & Development10(1), 142-146.

Clarke, A. M., & Nwosu, F. O. (2013). Fraud and Abuse in Healthcare Delivery Process. Journal of Functional Education, 3(7), 42-61. (2020). H.R.748 – CARES Act. 116th Congress (2019-2020). Retrieved from

Department of Justice. (2020). 976. Health Care Fraud—Generally. The US department of Justice (DoJ).

FBI website. (2020). Health Care Fraud. WHAT WE INVESTIGATE. Retrieved from

Grant, T. M. (2017). Leadership Strategies for Combating Medicare Fraud.

Pozgar, G. D. (2013). Legal and Ethical Issues for Health Professionals (3 ed.). Burlington, MA: Jones & Bartlett Learning.

Sarwar, U., & Nicolaou, M. (2013). Fraud and deceit in medical research. Journal of research in medical sciences. Journal of Isfahan University of Medical Sciences, 17(11), 1077-1081.

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