In the simplest terms, insurance fraud occurs when someone knowingly and with intent to defraud, presents or causes to be presented, any written or oral statement that is materially false and misleading to obtain some benefit or advantage, or to cause some benefit that is due to be denied.
The deciding factor between fraud and abuse is defined as the presence or absence of a provable lie.
Fraud occurs if:
• There is a false representation – the lie,
• The lie is be intentional or knowingly made,
• The lie must be made for the purpose of obtaining a benefit the claimant is not due, denying a benefit that is due, or obtaining insurance at less than the proper rate,
• The lie must be material, that is, it must make a difference: “If the truth had been told, would you have done anything differently?”
What about kickbacks?
Though not legally a fraud, offering or accepting kickbacks for the referral or settlement of cases is a reportable and highly prosecutable crime.
Kickbacks indirectly feed the problem of fraud and as a result, cause damage to our society and our economy.