Insurance Fraud Basics

Insurance fraud is a broad term that actually has many different forms, including:

  • Worker's compensation
  • Unemployment and disability insurance
  • Auto insurance
  • Homeowner insurance
  • Health insurance fraud 

Scams against government and private healthcare insurers are currently the largest type of insurance fraud. Although the exact amount is not known, it is estimated at tens of billions of dollars per year.

In some instances, fraud is easily detected but there are many instances where fraudulent conduct is difficult to identify and requires extensive investigations.

The SIU has a mandate during every investigation to determine if there is evidence of wrongdoing.

It is impossible to quantify the exact costs related to health care fraud today but it is currently one of the leading factors impacting health care costs in our country. Somewhere between 3 to 10 percent of total health care costs are related to insurance fraud, which translates into an estimated $80-$100 billion dollars per year. Imagine what could be done with that kind of money if it was not lost on insurance fraud.

Efforts are underway  across the country, by several organizations to educate the public about dental and health insurance fraud. Knowledge is certainly a powerful tool in helping to deter this type of activity.

Insurance fraud is a crime and there is a great chance of getting caught. The consequences are very serious, including fines and prison time.

Signs of Insurance Fraud

Patients, brokers, employers, and dentists all have an equal responsibility in identifying and fighting insurance fraud. These are just some of the signs:

  • Billing
    • For cosmetic services as medically necessary procedures
    • Billing for a procedure that is already included as part of another procedure
    • The insurance company more for a service than what is charged on the patient
    • For services that were never performed.
    • For services inappropriate for the patient age
  • Denied services resubmitted with different dates of service or as other services.
  • Dental offices/patients that conceal other insurance coverage that would pay for services (medical, dental, and/or workers' compensation).
  • Dental offices that do not charge or collect full co-payment, and/or deductibles
  • Dental office that offer discounts but do not indicate the discount on the insurance claim
  • Providing discounted or free services via coupons, discounts, and membership programs, but submitting the claim for the full amount
  • Falsifying treatment and/or financial records
  • Misrepresenting patient identity by using another person’s insurance
  • Misrepresenting the identity of the member and/or patient
  • Misrepresenting relationships by adding an individual on a policy who is not actually related to the policy holder
  • Misrepresenting the identity of the rendering dentist
  • Misrepresenting the actual treatment performed in order to receive benefits
  • Misrepresenting treatment dates to receive benefits
  • Misrepresenting the teeth numbers and/or surfaces treated in order to receive benefits
  • Misrepresenting a diagnosis to justify payment for certain services that otherwise would not be covered.
  • Post-dating claims
  • Submitting claims for services performed by unlicensed individuals.

 Who Can Commit Dental Insurance Fraud?

  • Practitioners
  • Office staff
  • Members and their dependents
  • Brokers
  • Agents
  • Employer groups 

Anyone who purposely benefits from an act of insurance fraud is guilty of committing health care fraud.

Who Can Report Dental Insurance Fraud?

Anyone! In New Jersey, if someone is aware of Dental Insurance Fraud occurring , they can report the information to the Office of the Insurance Fraud Prosecutor, the New Jersey Board of Dentistry, and Delta Dental of New Jersey.

Bottom line— there are many people who may have information regarding the routines and practices of a dental office. The dentists and their office staff have family and friends who have knowledge of the practice from discussions that take place at home or outside events, but the majority of reports concerning fraud are made by members and patients. The reasons for the report can be for any number of circumstances, such as:

  • A disagreement with the office
  • A sense of ethics
  • A guilty conscience

Other Ways of Detecting Dental Fraud and Abuse

Dental Insurance Fraud or Abuse can be detected in a variety of other ways. Special Investigations Units uncover many instances, and mandated anti-fraud training for insurance carrier employees provided on a regular basis have facilitated detection of fraudulent claims or applications

Insurance carriers conduct routine audits of their provider offices to verify the accuracy of claims they receive.  Delta Dental monitors all applications for dental insurance coverage and insures proper documentation is provided to verify they are eligible for coverage from a legitimate organization, and the number of employees reported is correct with regard to premiums quoted.

Top Reasons Why People Commit Dental Insurance Fraud

  1. Passing the buck—blaming it on someone else who “made” them do it
  2. Selflessness— wanting to “help” those in need
  3. Harmlessness  (I didn’t hurt or kill someone, I just made up some extra water damage.)
  4. “Everyone else is doing it”
  5. Justification— "I already pay a lot for a plan that I  hardly use. It’s my money anyway"
  6. Apathy/Lower ethical standards 
  7. Easy money maker— "The insurance company will never find out"