What statement best defines Fraud?

• A. Intentional deception or misrepresentation that a person makes to gain a benefit to which they are not entitled.
• B. Payment for items or services that the provider is not entitled to and for which the provider has not intentionally misrepresented facts to obtain payment.
• C. Incurring unnecessary costs as a result of deficient management practices, systems, or controls.
• D. Exclusion Authorities: The government may exclude inviolate providers from participation in federal health care programs.

Answer: (A)

Fraud rests on intentional deception or misrepresentation to obtain a benefit to which the deceiver is not entitled. That element of intent to deceive is what distinguishes fraud from honest mistakes or waste. In health care, fraud includes actions like billing for services not provided, upcoding to receive higher payments, or falsifying records to secure payment, all done with the aim of obtaining money or benefits improper to the claim.

The other statements don’t define fraud. One describes payment for items or services the provider isn’t entitled to, but without intentional deception, which points to improper payment rather than fraud. Another highlights unnecessary costs from poor management or controls, which is waste. The last refers to exclusion of providers from federal programs, a compliance action rather than a definition of fraud.