United States Department of Veterans Affairs

Fraud Waste And Abuse

More than $2 trillion are spent on health care each year in the United States, and fraud experts say that between $600 billion and $850 billion is wasted annually. The two leading causes of this waste are:

  • Unnecessary Care
  • Fraud
In fiscal year 2008, the VA Health Administration Center in Denver paid approximately $826 million in benefit payments. Health care fraud experts estimate that 3 to 5 percent of that amount ($24,780,000$41,300,000) was lost to fraud. What are health care fraud, waste and abuse?
  • Fraud is defined as the intentional misrepresentation of information to gain undeserved payment for a claim.
  • Waste involves spending federal health care dollars on services that are not necessary.
  • Abuse involves a questionable practice that is inconsistent with accepted medical or business policies.
There are serious penalties for anyone who knowingly and willfully commits fraud. A person found guilty of fraud is subject to both civil and criminal penalties. They can also be fined thousands of dollars and imprisoned.

Fraud is committed by providers, beneficiaries/patients, non-beneficiaries and health care plan employees through:
  • Excessive charges
  • Billing for services or supplies that were not rendered
  • Billing for services not necessary
  • Up-coding (A provider treats a patient for a minor complaint and bills for a more complex complaint for higher reimbursement amounts)
  • Duplicate billing
  • Overuse of control substance medication
  • Improper billing practices
We encourage beneficiaries to review the explanation of benefits they receive from their health care plan to determine if the plan was billed appropriately for the services they received. They should notify their health care plan of any discrepancies. Fraud awareness and training is our first line of defense against this drain on health care dollars. In addition to assisting beneficiaries to identify and report fraud, there is ongoing internal fraud training and provider education on fraud awareness. The fight against fraud, waste and abuse is being waged on all levels of the health care industry. Our goal is to protect our beneficiaries, providers and taxpayers.