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The Growing Issue of Healthcare Fraud in the US

The Growing Issue of Healthcare Fraud in the US

From compounding pharmacy fraud to medical billing fraud, there has been a sharp increase in both the frequency and the variations of medical fraud cases recently. It is an issue that needs to be tackled more seriously, and with better awareness, by both the new government, as well as the potential victims of such scams.

(Photo by Leila Navidi/Star Tribune via Getty Images)

Estimating the Seriousness of these Problems

To provide an idea regarding the serious nature of various medical fraud issues in America, a number of present and past stats can be referred to, as listed next:

$68 billion is a conservative estimation of how much healthcare frauds cost the US, as per the National Health Care Anti-Fraud Association

That is slightly less than 3% of the United States’ total health care spending (2.26 trillion) on an average

Other sources have estimated the percentage on an average to be as high as $230 billion, or approximately 10% of the total medical expenditure in the US

These stats provide a decent introduction to the growing issue, but they only paint a general picture. To understand the exact scams which are being used by scammers and even medical professionals and establishments, it is necessary to look at them individually.


Often designated as the Kickback Scheme, they are incentives used by a business party to influence doctors and other medical specialists. By doing any of the following, the medical expert earns a commission from the referred business/professional:

Prescribing specific medication from a specific manufacturer

Usage of specific equipment from a specific supplier/manufacturer, within the hospital

Suggestion for and/or usage of using specific medical devices from specific manufacturers

Prescribing any of the above, or medical procedures, just to meet target quotas

Any decision taken, procedure performed, medication prescribed, or suggestions made with the intention of getting kickbacks

It is both illegal and the offending party would be prosecuted as a scammer, if the medical professional is proven to have carried out any of the actions mentioned above, with anything else in mind but the best interests of the patients in question.

Compounding Pharmacy Fraud

Pharmacies can, under certain stipulations, recreate a drug specifically for a patient who is allergic to an essential drug, or cannot swallow it in its tablet/capsule form without aid. The act is called compounding pharmacy, where the drug is refined and remade to be suitable for a specific patient. This is not fraud, but a very helpful process that can and has saved lives.

See Also

The compounding pharmacy fraud, on the other hand, is a federal felony with serious repercussions. As this compounding pharmacy fraud post from Healthcare Fraud Group states, the felony would be committed when the pharmacist/pharmacy:

Bills the patient higher than they should

Overbills the patient by adding unnecessary ingredients

Manufactures and sells unlicensed and untested drugs that copy a well-known brand’s product

Manufactures and sells the special meds in mass quantities, without the due licensing and testing

The doctor or the pharmacy earns kickbacks from any of the parties that supply the ingredients necessary

Supplies the patient with refills without prescription

Other infamous scams used to cheat the American people are medical bill scams and Medicare/Medicaid scams. Awareness is key for patients to stay safe, but if they have already been scammed, it is best to consult with a medical fraud attorney as soon as possible.

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