Useful Insurance Fraud Statistics

Unlike the statistics of many crimes in the United States, useful insurance fraud statistics are difficult to compile and maintain.  Why are the incidents of insurance fraud, while quite prevalent, difficult to track?  There is not a nationally designated insurance fraud investigation system, leaving the discovery and punishment of insurance related crimes to a number of private, state, and federal agencies.  With so many agencies using various techniques and data management systems, useful statistics related to insurance fraud and consumers are spread throughout a number of resources.   What are some insurance fraud statistics which consumers should be aware? 

Medicare, Medicaid and medical claim fraud compose the largest numbers of investigated insurance fraud cases in the United States.  With nearly $60 billion dollars lost annually to fraud, Medicare and Medicaid fraud cases include questionable activities on the parts of patients as well as physicians or other healthcare related providers.  Medical claim fraud depletes government funded healthcare, costs taxpayers billions, and drives up private insurance rates. 

Medical identity theft is on the rise.  According to a 2010 research study, more than 1.4 million consumers have fallen to medical identity theft—with many being forced to pay for medical care that they did not receive to regain health care eligibility.   Despite these statistics, many healthcare providers do not request photo identification for services—relying solely on information provided on insurance cards and through patient registration—and making prosecution of such fraud difficult.  

Insurance funded prescription drug abuse and narcotic fraud cases add to the prescription drug problems.  With doctor shopping, poor communication and limited tracking methods between health care providers, pharmacies and regulatory groups, securing prescription drugs for personal addictions or for resale has become a reality.  it is estimated that $80 Billion dollars is lost annually by private insurance companies on fraudulent prescriptions. 

Staged auto accidents continue to plague auto insurers and drivers.  Staged auto accidents account for billions of losses annually to auto insurance providers.  Such staged accidents typically result in fraudulent injuries that are difficult to prove as false—such as sore muscles, sprains, strains or non specific aches and pains—and it is not uncommon for the accident fraud rings to include physicians, pharmacists and a number of other health service providers. 

Slip and fall frauds cost businesses and homeowners billions annually.  As with staged auto accidents, slip and fall injuries are often difficult to prove as false by nature—leaving businesses and homeowners targeted for claims and expenses reaching nearly $2 billion annually in the United States.

Fraudulent arson cases hinder claims for legitimate arson fire victims.  The Insurance Information Institute states that arson accounted for 30,500 fires in 2008—with approximately 14% of those being intentionally set for financial gain from insurers.  While determining that a fire was arson related is one matter—determining the arson was fraud motivated is another.  Insurance companies obviously do not pay for proven fraud arsons—but, the investigative process may lead to delayed or denied claims on legitimate non-fraud arsons as well.

In spite of the costs of fraud to consumers and businesses, insurance fraud remains an ever present issue with which the insurance companies must contend.

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