Insurance fraud is a class D felony and, depending on the severity of the fraud committed, it is punishable by a fine of up to £3,250 and up to 5 years in prison. Health insurance fraud falls into the category of larceny and carries up to a 10-year sentence. If the patient is injured or killed, the sentence may be much longer. Because it is so widespread, insurance fraud makes quite a financial impact on the system and is responsible for higher premiums across the board.
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Health Insurance Fraud
Health insurance fraud involves the filing of false claims through a private provider or the federal government. False claims include claims for services that were never rendered and claims for services that were unnecessary and indefensible. Health insurance fraud is commonly committed by doctors or other health care professionals responsible for filing insurance claims on behalf of their patients. Patients may also commit health insurance fraud by submitting false claims for reimbursement. In addition to the penal and financial penalties, a health care provider that commits this kind of fraud may lose his license to practice medicine.
Workers' Compensation Fraud
Workers' compensation fraud includes staging accidents, working while receiving compensation, statements of false loss, injuries unrelated to work, prior injuries, insurance agent theft, malingering and avoiding premiums. In addition to penal and financial penalties, individuals who commit workers' compensation fraud may lose future compensation eligibility, regardless of future hardship or circumstance.
Automobile Insurance Fraud
Automobile insurance fraud includes staging fake accidents, jump-ins (adding to the number of people in the car, which raises payouts), adjuster or claimant rings (conspiracy), false documentation, opportunistic injuries, staged thefts, bodyworks garage fraud and chop shops. An individual found guilty of automobile insurance fraud may lose his driver's license and, if he does not, may be subject to large spikes in insurance premiums in the future.
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