What are common types of fraud, waste, and abuse in health insurance, and how must agents respond to suspected cases?

• A. Common issues include upcoding, phantom billing, and unnecessary services; agents must report suspicions to the plan or CMS and avoid participating in wrongdoing.
• B. Fraud is rare.
• C. Agents should ignore suspected fraud.
• D. Only providers commit fraud.

Answer: (A)

In health insurance, fraud, waste, and abuse often show up as improper billing and care practices that drain resources and harm patients. Common examples include upcoding—charging for a more expensive service than was actually provided; phantom billing—billing for services that were never performed; and unnecessary services—providing or recommending procedures that aren’t medically needed. These patterns can erode trust and inflate costs, so recognizing them is a key responsibility.

Agents must report any suspicions to the plan's compliance or fraud, waste, and abuse program, or to CMS, and they should not participate in or enable these activities. Following the proper reporting channels, documenting concerns, and cooperating with investigations helps protect beneficiaries and the integrity of the program.