Investigation, 2016) and are estimated to increase over time as people live longer, which in turn
increases the demand for Medicare beneﬁts (Federal Bureau of Investigation, 2012).
The impact of healthcare fraud is signiﬁcant and wide-reaching. Examples of who may
suffer the ﬁnancial impact include:
insurance holders who have to pay higher premiums and out-of-pocket expenses
and also receive reduced beneﬁts and coverage;
businesses who pay increasing amounts to provide healthcare to their employees,
which results in the overall increased cost of doing business; and
taxpayers who pay more to cover healthcare expenditures in public health plans.
Beyond monetarydamages, healthcare fraud can also place patientsat risk of serious
physical harm when unnecessary procedures are performed and unapproved drugs
are administeredor when fraudsters tamperwith medical records.
Because of troublesome increases in healthcare fraud, the US federal government and
federal and state law enforcement agencies made healthcare fraud prosecution a primary
focus. The Patient Protection and Affordable Care Act (PPACA) of 2010 under the Obama
Administration, for example, provided an additional $350 million for healthcare fraud
prevention and enforcementefforts (US Department of Justice, 2016, 2).
While the FBI is the primary investigativeagency in the ﬁght against healthcare fraud, it
coordinates its efforts with the Health and Human Services Ofﬁce of Inspector General
(HHS-OIG), the Food and Drug Administration (FDA), Drug Enforcement Administration
(DEA), the IRS Criminal Investigation Division and various state and local agencies (FBI,
2012). However, despite morefunding and a more focused and integrative effort by multiple
government entities in the past few years, the threat of healthcarefraud remains high. This
is evidenced by record-settingdollar amounts in recent healthcare fraud scheme takedowns.
The goal of this analysis is to shed light on healthcarefraud as well as present solutions
to help control it. An analysis of the scope of this fraud highlights the importance of
effectively combatting it. Educating the public is an important step towards detecting and
preventing this fraud in the ﬁrst place. To understand this typeof fraud, the different types
of healthcare fraud are explained.Recent healthcare fraud cases and an analysis of the laws
and regulations applicable to healthcare fraud are also presented. This information is then
used to help explore some speciﬁc recommendations that can further help combat this type
of fraud. The remainder of this paper is organized as follows: ﬁrst, the scope of healthcare
fraud is presented along with some statistics on healthcare fraud prosecution; second, the
different types of healthcare fraud are discussedalong with recent example cases; third, an
overview of the laws and regulations applicable to healthcare fraud are given; and fourth,
speciﬁc recommendationsto combat healthcare fraud are offered.
2. Healthcare fraud scope and statistics
Healthcare fraud is an enormous world-wide problem. The World Health Organization’s
estimate of annual global healthcare expenditure was $6.5 trillion in 2012(WHO, 2016).
Each year, 7.3 per cent of that (Gee et al., 2011), or an estimated $470 billion, is lost to
healthcare fraud and error aroundthe world. In the USA, the picture is also bleak. While the
percentage of healthcare costs lost to fraud may beless in the USA compared to the rest of
the world, the total amount is still staggering. The National Healthcare Anti-Fraud
Association (NHCAA) estimates that $75 billion will have been lost to healthcare fraud in
the USA (National HealthcareAnti-Fraud Association, 2016). This amounts to 2.5 per cent of
all healthcare costs, accordingto the NHCAA estimate.