Scenario: Employee has a HDHP and goes to Hospital. Hospital offer to discount the employee’s deductible by 50%. (i.e. Employee owes only half of the deductible, $3,000 debt is now $1,500.) The plan pays the full amount due above the deductible.
Has fraud been committed (knowingly or not)?
It is fraud because there’s a 3rd party involved – the insurance carrier or self-funded medical program. are providing an HDHP contract which pays “after the deductible has been met” – pursuant to the IRS rules to establish HSAs, etc. The representation is to them – that the deductible has been met – when it has not been met – a lie to gain profit (in this case the payment of the balance from their coverage).
If a participant pays their “50%” out of their HSA / HRA account – then the insurance may end up getting a feed that illustrated the participants hadn’t met their deductible – even if the hospital is billing as if they had. It is not uncommon for an HSA administrator to process first and pass along their EOBs to the insurance to match up with the provider bills. In those cases, it would be a problem – because the insurance isn’t going to pay the hospital anything without knowing the full deductible had been satisfied.
The DOJ has not prosecuted this type of fraud in many years, but it seems rife for a state DOI to get involved.
Thanks to my CEBS’ colleagues. The above example and discussion came from our online link discussion.