Blue Choice

South Carolina Healthy Connections

Fraud, Waste and Abuse

  • Definitions
    • Fraud means an intentional deception or misrepresentation made by a person with the knowledge that the deception could result in some unauthorized benefit to himself or some other person. It includes any act that constitutes fraud under applicable federal or state law. As defined by CFR Title 42 §455.2, fraud is not committed by accident or mistake.
      • An example of fraud is billing for services not performed.
    • Waste results in the expenditure of resources in excess of need. It can simply be the result of sloppy, careless or inefficient billing or treatment. Waste does not involve the intent to deceive or misrepresent.
      • An example of waste is duplicate claim submissions for the same service.
    • Abuse means provider practices that are inconsistent with sound fiscal, business or medical practices and that result in an unnecessary cost to the Medicaid program, or provider practices that result in reimbursement for services that are not medically necessary or that fail to meet professionally recognized standards for health care. It also includes beneficiary practices that result in unnecessary cost to the Medicaid program. As defined by CFR Title 42 §455.2, abuse is similar to fraud except it may not be possible to show intent to deceive.
      • An example of abuse is billing for medically unnecessary procedures.

    Note: There is not always a clear distinction between fraud, waste and abuse. Judgment should be applied taking into

  • False Claims Act
    The False Claims Act (31 U.S.C. §§3729–3733) is a federal statute that covers fraud involving any federally funded contract or program including the Medicare (as well as Medicare Advantage) and Medicaid programs. The False Claims Act applies to all federally funded programs. It is the federal government's primary litigation tool in combating fraud against the government.
  • Provider Fraud Examples and Schemes
    • Billing for services not rendered
    • Unlicensed providers
    • Unbundling services — billing for services that are inclusive in the primary procedure
    • Prescription fraud — providing scripts for narcotics as a source of diversion
    • Kickbacks
    • Upcoding
    • Medical necessity issues/unnecessary services
    • Inappropriate modifiers resulting in payment
    • Altering diagnoses
    • Duplicate billing
    • Identify theft
If you suspect fraud or abuse, you can report this to the BlueChoice HealthPlan Medicaid Special Investigation Unit.