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What qualifies as insurance fraud?

| Feb 4, 2021 | blog

Insurance fraud may seem like a pretty cut-and-dry situation. If you attempt to increase your profits by lying to patients or their insurance companies, that is insurance fraud. 

What if you accidentally use the wrong code on a patient’s chart, however? Could you lose your license over a mistake? 

Pennsylvania law on insurance fraud

FindLaw states that in Pennsylvania, you must knowingly and intentionally take actions to defraud in order to be guilty of insurance fraud. The following instances include types of insurance fraud: 

  • Misrepresenting a patient’s condition on his or her file 
  • Releasing false statements to insurance companies 
  • Utilizing unlicensed brokers or unauthorized insurance companies  
  • Accepting compensation resulting from fraudulent actions 
  • Owning facilities that engage in fraudulent behavior 
  • Attempting to protect yourself from the consequences of insurance fraud by soliciting others 

Keep in mind that you must knowingly engage in these actions for fraud to be present. If you accidentally use the incorrect patient code, that by itself if not insurance fraud. If you realize your mistake and do not correct it, however, because you will benefit financially from the mistake, that is insurance fraud. 

Penalties for insurance fraud

Insurance fraud is a felony and will cost you your medical license. Additionally, you may serve up to seven years in prison and receive fines of up to $15,000. 

While being accused of insurance fraud can be a scary situation, there are several defenses that can help you. Aside from the lack of intent to defraud, if you are under duress to commit fraud, that is a valid defense. Entrapment by another party is also a defense against a fraud claim.