Medical Auditing Practice Exam

What is considered an action resulting in unnecessary costs to a federal healthcare plan?

1. Fraud

2. Abuse

3. Negligence

4. Mismanagement

The correct answer is: Abuse

Abuse in the context of federal healthcare plans refers to actions that result in unnecessary costs but do not necessarily involve illegal activity. This could include practices that are inconsistent with sound fiscal, business, or medical practices, leading to unreasonable payments or services that are not medically necessary. Such actions can involve billing for services that are not provided or for procedures that are excessive and do not adhere to proper standards of care. While fraud involves intentional deception for gain, which is a more severe violation, abuse focuses more on improper practices that inflate costs without the clear intent to deceive. Negligence pertains to failure to provide proper care or services, but it does not directly align with the concept of unnecessary costs, nor does mismanagement typically involve specific actions that lead to waste in spending like abuse does. Therefore, recognizing abuse as an action resulting in unnecessary costs is crucial in understanding how financial oversight and accountability work within healthcare programs.