Health Insurance Fraud Scams: Save Your Money and Save Your Life

by Barry Zalma, Esq., CFE


According to the Coalition Against Insurance Fraud and the Department of Health and Human Services, health care fraud costs Americans billions of dollars each year. Taxpayer-funded programs such as Medicare, Medicaid and others are among the biggest victims although individual consumers can lose significant amounts as well. Some of the frauds identified by the Coalition include:

Phantom treatments. Dishonest medical providers will bill health insurers for expensive treatments, tests or equipment never received by a patient or for illnesses or injuries the patient did not have.

Double billing. Unethical providers may double- or triple-bill health insurers for the same treatments, hoping the insurer won’t discover the overruns in the big stack of bills.

Shoddy care. Patients receive shoddy or substandard treatment for real and urgent medical problems. One eye doctor shined pen lights into patients’ eyes and said he’d performed cataract surgery. Surgeons have used defective pacemakers and catheters during heart surgeries, which have killed patients or required more surgeries to correct the problems.

Unneeded care. The patient might receive dangerous and even life-threatening treatment that was not needed. For example, one surgeon performed heart surgery on patients who didn’t need it.

Bogus insurers.  Insurance agents or brokers sell low-cost health coverage from fake insurance companies. Then they take your premiums and disappear. The insured is left without vital health coverage and don’t even know it until a claim is made.

Identity theft.  Cheaters steal a medical ID number, then use it to bill health programs tens of thousands of dollars for phantom treatment.

Crooks steal legitimate health information from dumpsters behind medical clinics, break into doctor offices and steal files, and hack into computer databases containing the legitimate medical records of people who never met the crook.

Rolling labs. Mobile diagnostic labs give needless or fake tests or physical exams to consumers, then bill health insurers for expensive procedures.

Runners or Cappers. A runner or capper is a person hired by a medical provider to drum up business. The runner or capper visits low-income areas, enticing people to come to a clinic for tests. Runners and cappers will even round up children for unneeded tests and procedures.

Not only could some of these scams cost you dollars out of your pocket, you or a loved one can be harmed because this type of fraud creates a false medical record about illnesses, diseases, injuries or other problems the patient never had. That information is available to insurers, so you could be denied health coverage or pay higher premiums because of a trumped-up medical record.

In addition billions of your tax dollars pay for fraudulent claims against Medicare, Medicaid and other taxpayer-funded health programs every year. These are your tax dollars being stolen.

Tips to keep in mind to avoid these scams:

  • Review your Explanation of Benefits reports when you receive them to ensure that they don’t reflect treatments you didn’t need and/or haven’t gotten, and that they don’t double charge for services for which your health insurance account has already been charged.
  • Check your medical providers’ credentials on your state’s Medical Board website to ensure they are licensed and have no disciplinary actions recorded against them.
  • Get second opinions before allowing treatment for serious problems to ensure that surgeries and other major procedures are needed.
  • Check your insurance agent’s and insurance company’s credentials through your state’s Department of Insurance website to ensure they are licensed and operating properly in your state.
  • Check the validity of your insurance policy directly with your insurance company to ensure that they have received your premium and that your coverage is actually in effect.
  • Educate your children. Hopefully your children will simply walk away from strangers, but they should be reminded that they shouldn’t provide strangers with their personal information and should not let strangers touch them or perform any tests on them.

If you think you’ve discovered a healthcare fraud, contact the insurer that paid the claim (the name, address and phone are on the Explanation of Benefits you receive in the mail).

Barry Zalma, Esq., CFE, is a California attorney, insurance consultant and expert witness specializing in insurance issues including fraud. Mr. Zalma has also written a number of books and writes a free newsletter on insurance fraud. See his new program on insurance fraud, “Who Got Caught?” online at