Fraud, waste, and abuse (FWA) in health and social care can cause significant financial losses and negatively impact overall system sustainability. The Centers for Medicare & Medicaid Services (CMS) estimates that improper payments in the Medicaid programs exceeded $31 billion in 2024 (CMS, 2024). Beyond financial impacts, FWA can damage reputations and trust with patients and the public, who may experience unethical practices or a lack of transparency. FWA in health and social care may also compromise the quality of patient care when resources are not used efficiently and appropriately.
The U.S. Department of Health and Human Services (HHS) Office of Inspector General (OIG) is the federal agency responsible for overseeing and investigating Medicaid FWA. In New York State, the Office of Medicaid Inspector General (OMIG) is responsible for state Medicaid program integrity. OIG describes fraud, waste, and abuse using the following definitions (OIG, Fraud, Waste, and Abuse for Health Care Providers):
Fraud is an intentional or deliberate act to deprive another of property or money by deception or other unfair means. The ways in which fraud occurs are as unique as the individual perpetrators, their motives, and the situations they exploit. Fraud is intentionally submitting false information to the Government (including situations in which you should have known the information was false) to get money or a benefit. (Examples of fraud include knowingly upcoding or billing for more expensive services than were actually performed, billing for health or social care services that were never provided, falsifying records, and receiving kickbacks for patient referrals).
Waste includes practices that, directly or indirectly, result in unnecessary costs to federally funded programs, such as overusing services. Waste is generally not considered to be caused by criminally negligent actions but rather by the misuse of resources. (Examples of waste include improper payments caused by insufficient or incorrect documentation that does not necessarily involve fraud, errors in reimbursement or billing, and ordering excessive numbers of tests or services).
Abuse includes actions that may, directly or indirectly, result in unnecessary costs to federally funded programs. Abuse involves paying for items or services when there is no legal entitlement to that payment. (Examples of abuse include billing Medicaid for unnecessary services, separately billing for services that are typically covered under a single service to increase payment, and charging extreme prices for supplies or services).
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Strategies to Help Prevent Fraud, Waste, and Abuse (FWA)
As frontline defenders of the health and social care system, health and social care systems play a critical role in identifying and preventing FWA. Understanding the above definitions of fraud, waste, and abuse is a crucial first step in being able to identify and prevent these practices and in creating and maintaining efficient and ethical health and social care systems. To effectively prevent FWA, health and social care providers can invest resources in developing and maintaining effective compliance programs that help avoid fraudulent practices and adopt practical strategies, including those outlined below.
Creating a Culture of Integrity and Encourage Reporting and WhistleblowingÂ
Fostering a culture of integrity and transparency within any organization is critical to effectively identifying and preventing FWA. This involves encouraging open communication and establishing a zero-tolerance policy towards FWA. Modeling ethical behavior and support of all efforts to combat FWA should be a tone clearly set by management/ leadership. Organizations should create a safe and anonymous reporting system that encourages employees to report all suspicious activities without fear of retaliation. Whistleblowing mechanisms are essential for identifying and addressing FWA early and should be clearly outlined in your organization’s policies and procedures.
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Accurate Documentation, Ethical Billing Practices, and Performing Routine Audits
Accurate documentation and coding practices are central in preventing fraud, waste, and abuse. Records must accurately reflect the services provided and coding must accurately represent those services. Health and social care providers should adhere to ethical billing practices by avoiding upcoding and other fraudulent billing methods. Clear billing protocols and procedures should be established and observed.
Regular internal audits of billing and coding practices should be performed to help identify and repair potential issues before they happen and external audits performed to provide an impartial assessment of practices and ensure compliance with regulations.
Education/Training and Clear Policies and Procedures
Continuous compliance and ethics education and training for health and social care providers and staff are crucial in staying informed about FWA risks, regulatory changes, ethical standards, and prevention strategies. Regular training on current billing and coding practices is essential to preserve billing accuracy.
Policies and procedures related to billing, coding, and documentation should be developed and implemented. Policies should be clearly communicated to all employees and reviewed and updated, at least annually.
Health and social care providers can help protect their organizations from financial, legal, ethical, and reputational damage by adopting practical strategies to combat FWA and ensuring a strong commitment to ethical practices. This aids in contributing to sustainable health and social care systems that are transparent, efficient, dependable, and ultimately allows providers to focus on the delivery of a high quality of care and improved patient outcomes.
If you suspect fraud, waste, or abuse, contact:
U.S. Department of Health and Human Services Office of Inspector General (OIG)
- Online at https://tips.oig.hhs.gov/
- By Telephone at: 1-800-HHS-TIPS (1-800-447-8477)
- By Fax at: 1-800-223-8164
- By TTY at: 1-800-377-4950
- By Mail at:
U.S. Department of Health and Human Services
Office of Inspector General
ATTN: OIG HOTLINE OPERATIONS
P.O. Box 23489
Washington, DC 20026
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New York State Office of the Medicaid Inspector General (OMIG)
- Online at https://apps.omig.ny.gov/bmfa/bmfa.aspx
- By Telephone at: 1-877-87 FRAUD (1-877-873-7283)
- By Fax at: 1-518-408-0480
- By Mail at:
- NYS OMIG Bureau of Fraud Allegations
- 800 North Pearl Street
- Albany, New York 12204