Article Preview
TopIntroduction
Healthcare loss due to fraud has risen steadily across the globe (Shiau et al. 2021). Healthcare insurance fraud will influence not only organizations by overburdening the already fragile healthcare systems, but also individuals in terms of increasing premiums in health insurance and even fatalities. In particular, China is an example of a country with almost universal coverage and a public institution of medical insurance. This means that the majority of the population relies on government subsidies for medical coverage. Thus the existence of medical insurance fraud greatly harms the health care of the entire citizenry of the country.
Since the 1990s, China has been making strides to establish a basic national medical insurance system to meet the medical needs of citizens suffering from illness or injury (Pan et al., 2016, Wang et al., 2014). China’s public health insurance programs are based on employment status and/or the Hukou system (a system of household registration used in mainland China) (Fang et al., 2017). The three main categories of health insurance programs in China are 1) the Urban Employees Basic Medical Insurance (UEBMI) covering urban employees; 2) the Urban Resident Basic Medical Insurance (URBMI) for urban residents who are not employed; and 3) the New Rural Cooperative Medical System (NCMS) providing insurance for the rural population (Pan & Lei, et L., 2016, Zhou et al., 2014, Yip & Hsiao, 2020, Yu, 2015, Zhao et al., 2014).
Employer and employee payroll taxes are the main funding source for UEBMI, but URBMI and NCMS are primarily funded by government subsidies (Meng et al., 2015). However, the continued increases in healthcare costs and rampant insurance fraud threaten the economic foundation of health insurance in China. (He & Wu, 2017). Compared to other types of fraud, healthcare insurance fraud is particularly damaging due to the sheer number of people who rely on government funds for medical care (He & Wu, 2017). For the many countries that have achieved universal coverage under a public healthcare system, fraud continues to reduce cost-effectiveness and erodes trust between all entities in the health care system (WHO 2011). Therefore, safeguarding medical insurance is essential not only to protect public health but for promoting and protecting economic development (Mesters et al., 2021).
According to the National Health Care Anti-Fraud Association in Washington D.C., “health care fraud is an intentional deception or misrepresentation that the individual or entity makes, knowing that the misrepresentation could result in some unauthorized benefit to the individual, or the entity, or to some other party” (NHCAA, 2020, Yang & Hwang 2006). And healthcare abuse is defined as “the provider practices that are inconsistent with sound fiscal, business, or medical practices, and result in an unnecessary cost, or in reimbursement of services that are not medically necessary or that fail to meet professionally recognized standards for health care” (NHCAA, 2020, Yang & Hwang 2006). Medical insurance fraud in this study refers to a broad definition, e.g. any intentional abuse or fraudulent use of the medical insurance fund caused by behaviors that do not conform to the normal medical treatment rules is regarded as medical insurance fraud.