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How To Combat Fraud
CNBC.com | September 12, 2011 | 10:35 AM EDT

With health-care insurance fraud on the rise, consumers, insurance providers and physicians are facing bigger headaches.

Though conservative estimates such as that of the National Health Care Anti-Fraud Association , NHCAA, put the problem at $60 billion a year, questionable medical procedures and identity theft are proving that the fraud issue is no longer just a financial one.

“The genesis of the problem is based on the fact the health-care system is so large and complex, it makes it so easy for those who want to commit fraud to get away with it,” says Joel Portice, president of Verisk Health , which specializes in health-care analytics and risk-management solutions.

Portice says even though the incidence of fraud in the industry has remained the same, the gross amount has risen with overall spending.

“The United States spends $2.7 trillion on health care, with between three and 10 percent of that amount lost to fraud,” he says. “That makes it a $70 billion dollar problem—and that’s on the short end—and over $234 billion on the high end.”

This loss directly impacts patients, taxpayers, and the government through higher health-care costs, insurance premiums, and taxes, according to the NCHAA, with individuals paying an additional $235 annually due to fraud.

Bad Medicine

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