Summary: Health industry officials estimate that fraud and abuse contribute to about 10 percent of the $700 billion-plus annual cost of U.S. health care. Weaknesses in the health insurance system allow unscrupulous health care providers--including medical equipment suppliers as well as practitioners--to bilk health insurance companies out of billions each year. At a time when financial ties are growing between health care facilities and the physicians who make referrals to them, health insurers, which operate independently, collaborate very little in confronting fraudulent providers. Further, high legal costs are deterring prosecutions. If the efforts of independent private payers, public payers, and state insurance and licensing agencies as well as state and federal law enforcement agencies were better coordinated, GAO believes that the attack on health care fraud and abuse would be more fruitful. GAO recommends that Congress establish a national health insurance fraud commission to analyze how insurers can standardize claims information and billing rules, how insurers can coordinate case development and prosecution efforts, whether and how to regulate unlicensed medical facilities, and what rules should govern physician referrals to medical facilities in which the doctor has a financial interest. GAO summarized this report in testimony before Congress; see: Health Insurance: Vulnerable Payers Lose Billions to Fraud and Abuse, by Janet L. Shikles, Director of Health Financing and Policy Issues, before the Subcommittee on Human Resources and Intergovernmental Relations, House Committee on Government Operations. GAO/T-HRD-92-29, May 7, 1992 (six pages).
