Health insurance fraud has been on the rise among both providers of student health insurance schemes and those engaged in efforts to obtain and use identifying health insurance information. Student or university-based health insurance is required for students at both public and private universities; international students are required to have local insurance for their visa applications, and local students have to go through a lengthy process of waivers if they want to use another health insurance option, such as a parent’s or spouse’s insurance.
Third party student health insurance providers have been found guilty of both collecting premiums and billing insurance companies for services never provided. Recently, the third party purveyor of student health insurance at Virginia Tech was found guilty of massive fraud, and the head of the scheme, a Texas-based insurance company executive, has been sentenced to a short prison term. This type of complex financial crime that occurs over state lines is the responsibility of the FBI to investigate and adjudicate.
Several smaller schemes have been identified that target students and student health insurance. When fraudulent providers obtain identifying health information, they can bill for services that were never provided. If students do not study the EOB, or explanation of benefits statements carefully, many times these billings slip by unnoticed. By committing smaller frauds spread over a larger number of people, these schemes can go undetected for longer periods of time.
Some of the recent frauds identified have been at California state universities, in which attempts were made to enroll students in fake clinical trials; part of their registration included insurance information. These enrollment attempts occurred at job fairs. This same scheme has been used by providers of screening tests at public events such as health fairs; health insurance information is obtained so results can be sent to providers. With access to this private health insurance data, these fraudulent practitioners can bill for services never performed.
International students often have health insurance coverage at home, and may be unfamiliar with our system of third-party services and billing. There have been a number of fraudulent schemes that have engaged international students, including the frequent demand for payment at the time of service, and then a second billing of the insurance providers.
An unfamiliarity with the workings of the complex third-party system of insurance reimbursement cause many students to skip reading their medical statements and trying to decipher their meaning. This common practice has helped the fraudulent providers, who are not caught unless identified and reported through careful investigation of patterns of behavior. With the recent prevalence of fraud with student health services schemes becoming better known, both university systems and students are becoming more aware and more careful regarding who has access to identifying student information.
Do you have questions about health insurance fraud? Contact us for more information, or to schedule a free consultation.