How does prescription fraud impact insurance costs?

How Prescription Fraud Impacts Insurance Costs

Prescription fraud is a big problem that impacts insurance costs a lot. Criminals are stealing billions from Medicare and Medicaid by fraud. The inspector general says it’s easy for criminals to rip off Medicare because it’s unbelievable how easy it is^[1]. Estimates say fraud costs over $100 billion per year^[2].

There are lots of ways criminals commit prescription fraud. Some examples are^[3]:

• Doctors prescribing medications patients don’t need
• Doctors billing for services not performed
• Patients lying about pre-existing conditions
• Patients exaggerating injuries to get more money
• Patients doctor shopping to get multiple prescriptions
• Patients making up fake claims

All this fraud makes insurance premiums cost more for everyone. Insurers have a hard time measuring how much fraud happens so they don’t know how much extra cost comes from it^[3]. Fraud also means some patients don’t get the right medications or treatments they need.

How Fraud By Doctors Raises Costs

Some doctors commit prescription fraud to make more money. A big problem is doctors prescribing medications patients don’t really need. This happens a lot with opioids and other controlled medications. Doctors might get kickbacks from pharmaceutical companies for prescribing certain drugs. They can also bill insurers for medical services they never actually did.

All this unnecessary prescribing and billing raises costs for insurers. That gets passed on to patients through higher premiums and out-of-pocket costs. Some doctors open “pill mills” just to prescribe lots of opioids and make money from it. This happened a lot in Florida and Ohio^[4].

How Patients Commit Prescription Fraud

Patients also commit prescription fraud in different ways. Many patients lie about pre-existing conditions when buying insurance so they don’t have to pay more. When they get sick, the insurer covers conditions they didn’t disclose.

Some patients exaggerate injuries from an accident to get more money from claims. They might say an injury is worse than it really is. Patients also doctor shop to get multiple prescriptions for opioids and other drugs. This leads to higher costs and drug abuse problems.

There is also straight up fake claims fraud. Patients make up fake medical bills and submit them to insurers. With fake claims, patients get money for services that never happened.

Solutions For Prescription Fraud

There are some ways to reduce prescription fraud^[5]:

• Better tracking of prescriptions with state databases
• More patient education about drug risks
• Closer monitoring of doctors and pharmacies
• Stiffer penalties for fraud
• More coordination between private insurers and government

Patients can also help by protecting their information, questioning unusual medical bills, and reporting fraud. Doctors should make sure prescriptions are medically needed. Pharmaceutical companies need more ethics in marketing and sales.

Prescription fraud is a big challenge but with everyone working together we can reduce it. This will lower insurance costs and help patients get proper treatment.