5 Warning Signs of Fraud and Abuse in Healthcare

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Written by Katherine Zheng, PhD, BSN Content Writer, IntelyCare
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Reviewed by Aldo Zilli, Esq. Senior Manager, B2B Content, IntelyCare
A busy doctor's office, with many patients, nurses, and administrators.

Fraud and abuse in healthcare are major economic issues impacting facilities, patients, and insurers. In 2019, the Department of Justice reported $2.6 billion in fraud settlements from the healthcare industry alone. With settlement costs continuing to rise each year, it’s important to stay vigilant for signs of fraud and abuse within your own facility.

Identifying and reporting suspicious behavior early on can help protect patients, prevent excessive costs, and promote ethical standards. We’ll walk you through five common warning signs that can help you detect and prevent cases of fraud and abuse.

What Is Fraud and Abuse in Healthcare?

In healthcare, fraud refers to deception or a misrepresentation of facts that leads to unverifiable payments or claims. Abuse refers to inappropriate or medically unnecessary actions that are conducted outside of regular standards of care.

Fraud and abuse can be committed by many different stakeholders in the healthcare system, including:

  • Facilities — Facility leaders may sometimes commit fraud or abuse to save on operational costs.
  • Providers While patients trust providers to maintain ethical and professional integrity, some may try to exploit their care for financial gain.
  • Patients — Patients can also sometimes commit certain types of insurance fraud in an attempt to pay less for their care.

5 Warning Signs to Look Out For

You may be a facility leader trying to prevent exploitation, a healthcare provider suspicious of your facility’s management practices, or an administrator noticing unusual claims for a patient. Regardless of your role, these five common warning signs (illustrated with medical fraud and healthcare abuse examples) can help you promptly identify and report on potential cases.

1. Excessive Care Costs or Services

One of the most common signs of fraud or abuse in healthcare is unusual costs or repeated service use that seems out of context. This may be reflected by costs or services that are much higher or frequent than expected based on a facility’s typical operations.

What to Watch Out For

  • A sudden or unusually high volume of one type of service provided at a facility
  • Medications or services that are billed at a much higher rate than usual
  • Consistent submissions of singular insurance claims for services that should be bundled


A healthcare administrator offers financial incentives to outside providers who refer a high volume of patients to their facility (i.e., kickback).

2. Inconsistent Documentation

Another warning sign of potential fraud or abuse is inconsistency across multiple documents for the same patient. If a patient’s records have conflicting pieces of information, this could mean that there’s something more going on behind the scenes.

What to Watch Out For

  • Dates and times of services that don’t match service availability (i.e., on holidays)
  • Medical histories reflecting frequent changes to a patient’s diagnosis
  • Inconsistent signatures for the same person across different consent/authorization forms


A healthcare provider purposely bills for procedures different than the ones provided to get higher reimbursements from Medicare.

3. Unverifiable Information

Sometimes, an insurance administrator or provider might want to follow-up to get more information about a patient’s recent care. If this information is unable to be verified, this could indicate potential fraud or abuse.

What to Watch Out For

  • Patients who are unable to recall receiving services that were documented in their chart
  • New patient information that doesn’t match previous health records
  • X-rays or lab results for a patient that don’t reflect treatment they received


A patient’s insurance card is stolen and being used by someone else who receives care under their name.

4. Treatment Outside Standards of Care

If a patient is receiving treatment that doesn’t align with basic standards of care, this is usually a red flag. While providers may try out unconventional treatments for rare conditions, unusual care that occurs regularly can be a sign of fraud or abuse in healthcare.

What to Watch Out For

  • Claims reflecting services that aren’t medically necessary for a patient’s condition
  • Medical histories reflecting an unusual increase in one type of service or medication
  • Consistent disagreements from healthcare staff in how care is delivered to patients


A facility leader instructs their providers to routinely prescribe an unnecessary medication to get more payments.

5. Delayed Submission of Records

Sometimes, the transfer of information between various parties in the healthcare system can take longer than usual. But if this happens repeatedly from the same party, this may mean that the delays are purposeful.

What to Watch Out For

  • Patient health records filled out weeks or months after their appointment dates
  • Facilities or providers that are consistently submitting late insurance claims
  • Significant delays in the transfer of patient information during referrals


A patient’s provider withholds information from a pharmacy needing to fill a prescription to buy time to falsify treatment records.

How to Prevent Fraud and Abuse in Healthcare

The U.S. has enacted several laws protecting against common types of fraud and abuse. If an individual gets caught committing fraud and abuse in healthcare, penalties can be severe. You can help protect your facility and support law enforcement efforts by taking the following steps.

  • Conduct audits: Conduct regular audits of medical claims to help identify warning signs of fraud and abuse more promptly.
  • Promote a just work culture: Promote a just work culture and maintain ethical standards by educating your employees about fraud and abuse prevention.
  • Report suspicious behavior: If you’re concerned about suspicious behavior, submit a complaint to the Office of Inspector General (OIG) for the U.S. Department of Health and Human Services. The OIG details everything you need to know, from how to report insurance frauds to what happens when you file a case.

Learn More Ways to Promote Ethical Care Standards

Identifying signs of fraud and abuse in healthcare is one of many ways to preserve ethical standards at your facility. Don’t miss out on other helpful tips and strategies to improve your care delivery by signing up for IntelyCare’s free newsletter today.

Legal Disclaimer: This article contains general legal information, but it is not intended to constitute professional legal advice for any particular situation and should not be relied on as professional legal advice. Any references to the law may not be current as laws regularly change through updates in legislation, regulation, and case law at the federal and state level. Nothing in this article should be interpreted as creating an attorney-client relationship. If you have legal questions, you should seek the advice of an attorney licensed to practice in your jurisdiction.