The National Health Care Anti-Fraud Association estimates that at least 3% of the $2 trillion, or $60 billion, spent annually on health care in this country is lost to fraud.

Health care fraud is defined as the intentional deception or misrepresentation made by a person with the knowledge that the deception could result in some unauthorized benefit to that person or some other person. Waste is deemed to occur when services rendered are not cost-effective. Abuse is any provider practice that is inconsistent with sound fiscal, business or medical practices and results in unnecessary costs to a health care program or in payment of services that were not medically necessary or failed to meet the standard of care.

Though difficult to measure, the extent of each of these practices becomes evident through retrospective audits and medical chart reviews. New technologies have increased auditors’ ability to recognize improper payments, aberrant trends...

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