The primary source of fraud in health care is through false claims.
False claims are illegal and punishable through The False Claims Act, otherwise known as "Lincolns' Law". This law was enacted during the Civil War, updated by Ronald Regan in 1986 and contains "qui tam" provisions allowing ordinary citizens to sue on behalf of the government and collect restitution. (Phillip and Cohen) Also, under U.S. Code Title 18 Part I Chapter 63 section 1347 health care fraud is punishable by fine, or imprisonment for up to 10 years, or in cases of death a life sentence.
There are many types of false claims. Services not rendered is best described as billing for services that were never delivered to patients. Physicians simply add on a few extra services that they did not perform for the patient. A common example would be when ordering a complete blood count (CBC) for a patient to bill for additional blood chemistry tests that doctors hadn't performed. In this very situation, two emergency room doctors were paid $92 million after bringing to light a "whistleblower" suit against Columbia/HCA. (Phillips & Cohen)
Lack of Medical Necessity is another term used to describe a situation when a doctor or health care provider bills the insurance for procedures that are not necessary. ...