What Is Health Care Fraud?


Health care fraud is not a victimless crime. It can also create patient safety issues. Health care fraud increases health care costs for everyone, including copays, deductibles and cost sharing.

Health care fraud is a serious crime in the United States. Blue Cross Blue Shield of Michigan investigates tips reported to our Fraud Hotline and works with local, state and federal authorities to bring people who commit health care fraud to justice.

How does fraud work?

  • Doctor shopping - Using multiple doctors or visiting several emergency rooms in order to obtain multiple prescriptions for controlled substances
  • Identity swapping - Allowing an uninsured person to use an insured person's insurance or pharmacy cards
  • Identity theft - Illegally assuming the identity of another individual to obtain medical services or drugs
  • Ineligible dependents - Keeping an ex-spouse or dependents who are no longer eligible on a contract or enrolling non-family members on a health insurance policy
  • Services not rendered - Charging for a service that was not provided. This can include medical services as well as prescriptions that were billed but not dispensed by a pharmacy
  • Durable Medical Equipment - A DME company will use different provider numbers or business names to bill for both the rental and purchase of the same piece of equipment or will bill for equipment or supplies never received by the patient
  • Unbundling - Billing separately for procedures and supplies that are considered part of a single procedure or included as part of a global fee in order to maximize their reimbursement
  • Upcoding - The provider submits a claim for a more expensive service, supply or piece of equipment than was actually provided
  • Telemarketing fraud - Providers not actively involved in patient medical care using telemarketers to promote high cost productions that offer little or no medical benefit to the member
  • Misrepresenting services - Billing procedures under different names or Current Procedural Terminology, or CPT, codes in order to obtain coverage for services such as cosmetic or experimental procedures, which are otherwise not covered by the member's plan
  • Free screenings - Providers advertise for tests such as hearing tests or chiropractic screenings as free in order to obtain a member's insurance information. The information is then used by the providers to bill the member's insurance company for the cost of the tests and other unnecessary or unwanted services
  • Unlicensed providers - Individuals who are unlicensed or have had their license suspended or revoked will see patients and bill the cost of their services by using the name of another health care professional or an address located in a different state
  • Kickbacks - Providers exchange money or things of value for the referral of patients for services that are not medically necessary or have no validity or diagnostic value

How fraud impacts you

Fraud carries other implications for victims. You could:

  • Receive higher health care costs, including copays, deductibles and cost sharing
  • Be subjected to unnecessary or unsafe medical procedures or treatments
  • Find that your insurance benefits have unexpectedly been exhausted
  • Have erroneous information added to your medical records
  • Receive the wrong medical treatment
  • Unexpectedly fail a physical examination for employment
  • Be deemed uninsurable as a result of medical identity theft

Reporting Fraud

If you suspect fraudulent activity, you can report it to us confidentially. We maintain a policy that enforces non-retaliation and non-intimidation against those who report potential concerns.

File a report Learn more about reporting fraud