Fraud, waste, and abuse

Healthcare fraud

The purpose of this information is to increase your awareness of healthcare fraud, and to ask for your cooperation in reporting suspicious incidents to Blue Shield of California. It is important that everyone be aware of possible fraud and abuse and report the incident as quickly as possible.

Whether it is an organized effort by a provider, member, or any other individual to deliberately cheat, or a healthcare provider who occasionally bends the rules to serve the perceived needs of a patient, healthcare fraud is a serious and growing problem. It exploits patients and robs them of services and resources critical to their well-being.

By definition, fraud means that someone is trying to obtain something of value by intentionally deceiving, misrepresenting, or concealing. There are at least as many kinds of fraud as there are types of people who commit it, and fraud in the health care system is no exception. Here are a few examples of common types of healthcare fraud:

  • Provider fraud
    • Billing for services not provided
    • Billing of "free" services
    • Incorrect reporting of diagnoses or procedures to maximize payments
    • Waiver of deductible and/or copayment (unbundling, up-coding)
    • Misrepresentation of dates or descriptions of services
    • Billing non-covered services as covered items
  • Subscriber fraud
    • "Loans" an ID card to someone
    • Alter amounts charged on claim forms or prescription receipts
    • Files false claims
  • Non-subscriber fraud
    • Using a stolen ID card to receive medical services


Healthcare fraud costs the United States approximately $60 billion annually. In 1989, Blue Shield established the Special Investigations Unit to centralize the company's efforts to combat this criminal activity.

Cooperation with anti-fraud efforts in the industry, as well as Federal, State, regulatory agencies, and local authorities, is a crucial part of the department's activities. Criminal activities are referred to the appropriate government agency as quickly as possible.

What to do if you suspect fraud

We urge all individuals to tell us when they suspect fraud. If at any time you suspect a fraudulent issue, please call us as soon as possible. All reported incidents are taken seriously. You may remain anonymous or include your contact information. The SIU reviews all reports and may contact you if additional information is needed.

Each incident of fraud, uncovered and stopped, saves money for every consumer. And that is as important to you as it is to us.


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Page last updated: 10/01/2023