Fraud, Waste and abuse

Definition of Fraud, Waste and Abuse

Fraud is generally defined as knowingly and willfully executing, or attempting to execute, a scheme or artifice to defraud any health care benefit program or to obtain (by means of false or fraudulent pretenses representations, or promises) any of the money or property owned by, or under the custody or control of, any health care benefit program. (18 U.S.C. § 1347)

Waste is overutilization of services or other practices that, directly or indirectly, result in unnecessary costs to the health care system, including the Medicare and Medicaid programs. It is not generally considered to be caused by criminally negligent actions, but by the misuse of resources.

Abuse includes any action(s) that may, directly or indirectly, result in one or more of the following: 

  • Unnecessary costs to the health care system, including the Medicare and Medicaid programs 
  • Improper payment for services 
  • Payment for services that fail to meet professionally recognized standards of care 
  • Services that are medically unnecessary

Abuse involves payment for items or services when there is no legal entitlement to that payment and the entity supporting Monroe Plan (e.g. health care provider or supplier) has not knowingly and/or intentionally misrepresented facts to obtain payment.
Abuse cannot always be easily identified, because what is “abuse” versus “fraud” depends on specific facts and circumstances, intent, and prior knowledge, and available evidence, among other factors.

Relevant Laws Pertaining to Compliance, including Fraud, Waste and Abuse

  • Federal False Claim Act
  • New York State False Claim Act
  • The Deficit Reduction Act
  • Federal Anti-Kickback Statute
  • Federal Stark law
  • Health Insurance Portability and Accountability Act (HIPAA)
  • Health Information Technology for Economic and Clinical Health Act ( HITECH)

Refer to Federal and State Resources for more information pertaining to these laws and other regulatory requirements.