A pharmacist takes a 30-day prescription and inputs it as four weekly prescriptions - quadrupling the Medicaid dispensing fee; a fraud ring obtains a list of Medicare patients who recently underwent hospital outpatient procedures and starts submitting phony claims, threatening the lives of parties who expose the scheme; the local news reports that five teachers who find a pharmacy to dispense large prescriptions for narcotics covered under the school health plan subsequently sell the drugs. What do these three stories have in common? They are all real fraud incidents.

The health care industry estimates that somewhere between $70 billion and $230 billion of medical care spending is fraudulent. And while electronic medical records are being hailed as a way to save money, they are actually making it easier to commit fraud. Much as the digitization of health records has eased information exchange between legitimate parties, it also has given fraudsters an easier path to patient data. The rate of fraud based on exposure to health data was 7 percent in 2009, up from 3 percent in 2008.

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