Definitions of fraud, waste and abuse
Definitions are a little different depending on which plan you have.
- Priority Health plan definitions, including Priority Health Medicare
- Medicaid plan definitions
- FEHB plan definitions
Definitions used by most Priority Health plans, including Priority Health Medicare
Fraud means an intentional deception, misrepresentation, false statement(s) or false representation of material facts with the knowledge that the deception could result in unauthorized benefit or payment for which no entitlement would otherwise exist. These acts may be committed either for the person's own benefit or for the benefit of some other party. It includes any act that constitutes fraud under applicable Federal or State law.
Waste refers to the extra costs that happen when health care services are overused or when bills for services are prepared incorrectly. Unlike fraud, waste is usually caused by mistake rather than illegal or intentionally wrongful actions.
Abuse means practices that are inconsistent with sound fiscal, business or medical practices and result in an unnecessary cost to Priority Health or in reimbursement for services that are not medically necessary, violation of an agreement or certificate of coverage, or that fail to meet professionally recognized standards for health care. It includes member, employer group, agent or provider practices that result in unnecessary cost to the Priority Health.
Intentional deception or misrepresentation made by a person with the knowledge that the deception could result in some unauthorized benefit to himself or some other person. It includes any act that constitutes fraud under applicable Federal or State law (42 CFR § 455.2)
Provider practices that are inconsistent with sound fiscal, business or medical practices, and result in an unnecessary cost to the Medicaid program, or in reimbursement for services that are not medically necessary or that fail to meet professionally recognized standards for health care. It also includes recipient practices that result in unnecessary cost to the Medicaid program. (42 CFR § 455.2)
Knowingly and willfully executing, or attempting to execute, a scheme or artifice to defraud any health care benefit program or to obtain (by means of false or fraudulent pretenses, representations, or promises) any of the money or property owned by, or under the custody or control of, any health care benefit program. Fraud can be committed by a contractor, a subcontractor, a provider, and/or a FEHB beneficiary/enrollee. It includes any act that constitutes fraud under applicable Federal and/or state law.
Waste is the expenditure, consumption, mismanagement, use of resources, practice of inefficient or ineffective procedures, systems, and/or controls to the detriment or potential detriment of entities. Waste is generally not considered to be caused by criminally negligent actions but rather the misuse of resources.
Includes actions that may, directly or indirectly, result in: unnecessary costs to the FEHB Program, improper payment, payment for services that fail to meet professionally recognized standards of care, or services that are medically unnecessary. Abuse involves payment for items or services when there is no legal entitlement to that payment and the provider has not knowingly and/or intentionally misrepresented facts to obtain payment. Abuse cannot be differentiated categorically from fraud because the distinction between "fraud" and "abuse" depends on specific facts and circumstances, intent and prior knowledge, and available evidence, among other factors. Abuse can be committed by a contractor, a subcontractor, a provider, and/or a FEHB beneficiary/enrollee.