What is fraud?

People often ask… “Is there fraud, corruption and waste in healthcare?”

Fraud, corruption and other forms of inefficiencies in healthcare are a serious problem and a serious financial risk to all sectors. Although there is no precise measure of fraud and corruption in the healthcare sector and although the majority of healthcare providers are honest and well-intentioned, a minority of providers and patients are intent on abusing the system. These can cost healthcare systems – and taxpayers!- billions of euros and put beneficiaries’ health and welfare at risk.

Fraud and corruption know no boundaries. Fraud and corruption occur whether healthcare systems are predominantly public or private, well funded or poorly funded, and technically simple or sophisticated; no country can claim they are free of fraud or corruption.

Fraud has been defined as

‘…the use or presentation of false, incorrect or incomplete statements and/or documents, or the non-disclosure of information in violation of a legally enforceable obligation to disclose, having as its effect the misappropriation or wrongful retention of funds or property of others, or their misuse for purposes other than those specified’.[1]

This definition includes two important aspects, the intentional action and the resulting advantages.

Fraud in healthcare can take the form of

  • healthcare providers knowingly billing for services and/or supplies that were not provided,
  • healthcare providers knowingly billing for more expensive services than those provided,
  • patients claiming for exemption of healthcare costs when they are not entitled to,
  • someone using another patient’s health card to access medical care, supplies or equipment.

Fraud schemes range from an individual’s dishonest activity to broad-based operations by an institution or group.

Corruption has been defined according to whether it occurs in the public or in the private sector

‘Passive corruption in the public sector occurs whenever a public official, directly or indirectly, intentionally or in circumstances where it should have been known to him or her, requests or receives any undue advantage for himself or herself or for a third person, or accepts an offer or a promise of such advantage, in order to act or refrain from acting in the exercise of his or her official functions’.

‘Directly or through an intermediary, requesting or receiving an undue advantage of any kind, or accepting the promise of such an advantage, for oneself or a third party, while in any capacity directing or working for a private sector entity, in order to perform or refrain from performing any act, in breach of one’s duties‘.[1]

[1] Institute of Medicine of the National Academies, USA

Waste occurs for example:

  • When more exams or treatments are prescribed than necessary,
  • When medical errors occur, resulting in inefficiently delivered services,
  • When unnecessary documentation leads to excessive administration costs.

Click on the next subpage or here to learn more about the EHFCN Waste Typology Matrix©, a lexicon of infringements created by EHFCN.