What Is Dental Insurance Fraud?
Dental insurance fraud is a form of health insurance fraud in which dental insurance companies are tricked into making payments for false claims. The problem is a large one, wasting billions of dollars in dental insurance payments each year. According to the California Department of Insurance, alleged cases of fraud are settled administratively, while others are prosecuted as criminal matters.
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Features
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When a person who has dental insurance receives dental work, the person who provided their care will generally submit a claim the patient's insurance company. The insurance company will then compensate the health care provider for the services provided. For financial gain, an unscrupulous dental services provider might submit false claims to the insurance company, causing the insurance company to provide him with a larger payment than to which he is entitled.
Types
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Dental insurance fraud can take many forms. A service provider may bill the insurance company for services that they have not rendered. In other cases, the provider may submit multiple claims for the same procedure. Another common fraudulent practice is unbundling, in which a set of services provided at the same time is billed to the company as a number of separate, more expensive services. Dental services providers also may provide sham treatments or unnecessary procedures, simply to receive compensation.
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Size
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According to the National Health Care Anti-Fraud Association, approximately 3 percent to 5 percent of all money spent on health care is spent due to fraud. According to the Chicago Dental Society, dental services account for approximately 5 percent of all health care costs, reaching almost $98 billion annually. Therefore, if the rate of fraud is consistent between the dental industry and the health care field as a whole, between $2.9 billion and $4.9 billion of dental spending goes to fraud each year.
Effects
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The main effect of dental insurance fraud is that increases the amount of money that insurers must pay out to settle claims. To compensate for these payments of false claims, insurers must collect additional revenue from elsewhere, either by raising premiums or by cutting certain services.
Expert Insight
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Although dental insurance fraud is widespread enough to cost billions of dollars each year, only a very small percentage of it ever is detected. According to Stephen W. Connaghan, a health care fraud investigator with the insurer United Concordia, only about 4 percent of dental insurance fraud is detected, with even fewer practitioners successfully prosecuted.
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