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Fraud is Everyone’s Business

Health care fraud affects all of us. For members, health care fraud results in higher premiums and out-of-pocket costs and reduced benefits. For employers, fraud drives up the costs of doing business and providing health plans to employees.

Protect Yourself From Health Care Fraud

  • Ask your doctor about the services you receive, such as:
    • Why are they needed?
    • What do they cost?
  • Talk to your doctor if a treatment plan seems questionable or excessive. If you don’t agree with the plan, get a second opinion.
  • Be careful about disclosing your insurance information over the phone or online. Protect your HMSA membership card as if it were a credit card.
  • Compare your HMSA Report to Member and/or your medical bills with your records. Ask yourself:
    • Are the dates of service correct?
    • Were the services actually performed?
    • Is the cost-share amount correct?
  • Be wary of ads or promotions that offer free tests, treatment, or services especially when you’re asked to provide insurance information or a copy of your HMSA membership card.
  • Let HMSA know if a provider waives copayments or bills more than the cost-share amount.

Fraud carries other implications for victims

You could:

  • Be subjected to unnecessary or unsafe medical procedures or treatments.
  • Discover that your health plan benefits have been unexpectedly exhausted.
  • Have incorrect information added to your medical records.
  • Receive the wrong medical treatment.
  • Unexpectedly fail a physical exam for employment.
  • Be denied insurance as a result of medical identity theft.

Identify Provider and Member Fraud

Know what to look for. Here are examples of provider and member health care fraud that you should report to HMSA.

Provider fraud can include:

  • Billing for services that weren’t performed.
  • Falsifying a patient’s diagnosis to justify tests, surgeries, or other procedures that aren’t medically necessary.
  • Misrepresenting procedures performed to obtain payment for noncovered services, such as cosmetic surgery.
  • Upcoding, which means billing for a more-costly service than the one that was performed.
  • Billing each stage of a procedure as if they were separate procedures.
  • Accepting kickbacks for patient referrals.
  • Waiving patient copayments or deductibles and overbilling the health plan.
  • Billing for services that were offered or advertised as free.
  • Billing for services provided to their immediate family members.

Member fraud can include:

  • Using someone else’s health plan benefits for themselves.
  • Not removing someone from a health plan when they’re no longer eligible (e.g., a former spouse or children who are no longer dependents).
  • Adding someone to their policy who isn’t eligible (e.g., grandchildren or over-aged dependents).
  • Visiting several doctors (“doctor shopping”) to obtain multiple prescriptions, often for controlled substances.

Report Concerns of Fraud

If you suspect health care fraud or abuse, please report it:

Be aware of fraud, waste, and abuse schemes

Medication and medical supplies fraud

If you receive medications or supplies in the mail that you or your doctor didn’t order, you might be the target of a fraud scheme.

Here’s what to do:

  • Return any medications or medical supplies that you receive if you didn’t order them.
  • Report the company to HMSA Special Investigations Unit.

Services not performed

Providers may bill insurers for services they’ve never rendered.

What you can do:

  • Review all Reports to Member issued for your HMSA plan.
  • Contact a Customer Relations representative if you notice questionable charges or provider names you don’t recognize.

Fraud & Abuse Laws

False Claims Act [31 U.S.C. § § 3729-3733]

The civil FCA protects the Government from being overcharged or sold shoddy goods or services. It is illegal to submit claims for payment to Medicare or Medicaid that you know or should know are false or fraudulent. Filing false claims may result in fines of up to three times the programs’ loss plus $11,000 per claim filed. Under the civil FCA, each instance of an item or a service billed to Medicare or Medicaid counts as a claim, so fines can add up quickly. The fact that a claim results from a kickback or is made in violation of the Stark law also may render it false or fraudulent, creating liability under the civil FCA as well as the AKS or Stark law.

Under the civil FCA, no specific intent to defraud is required. The civil FCA defines “knowing” to include not only actual knowledge but also instances in which the person acted in deliberate ignorance or reckless disregard of the truth or falsity of the information. Further, the civil FCA contains a whistleblower provision that allows a private individual to file a lawsuit on behalf of the United States and entitles that whistleblower to a percentage of any recoveries. Whistleblowers could be current or ex-business partners, hospital or office staff, patients, or competitors.

There also is a criminal FCA (18 U.S.C. § 287). Criminal penalties for submitting false claims include imprisonment and criminal fines. Physicians have gone to prison for submitting false health care claims. OIG also may impose administrative civil monetary penalties for false or fraudulent claims, as discussed below.

The Hawaii False Claims Act (HFCA) HRS § 661-21

The Act protects whistleblowers who report fraud to the state and allows individuals to sue those who knowingly submit false claims to the state or its counties. The law imposes liability on defendants who knowingly present false claims, misappropriate government property, fail to report the discovery of an inadvertent false claim, or conceal or avoid payment obligations. Whistleblowers are protected against retaliation, and the state may seek penalties and damages from those who violate the act.

For more fraud, waste, and abuse resources, visit:

CURRENT AS OF 04/16/2025