In 2007, the U.S. spent nearly $2.3 trillion on health care and public and private insurers processed more than 4 billion health insurance claims. The National Health Care Anti-Fraud Association (NHCAA) has estimated that, conservatively, 3% of all health care spending—or $68 billion—is lost to health care fraud. Other estimates by government and law enforcement agencies place fraud-related losses as high as 10% of annual health care spending; at this rate, the losses in 2007 alone—over $220 billion—would have been enough to cover the uninsured.

This report, funded by the Robert Wood Johnson Foundation, delves into the notion of health care fraud as a systemic issue affecting public and private insurers alike, in the individual market, the employer-sponsored group market, and public programs. It further discusses the implications of Medicare and Medicaid's requirements, as government-sponsored entities, to report on fraud.

The failure to systematically and routinely measure the scope of fraud is characteristic of the insurance industry as a whole, and it is not limited to the United States. Numerous government agencies have reported that no segment of the health care delivery system is immune from fraud and that instances of fraud and abuse can be found involving all segments of the health care industry and in every geographical area of the country.