Health Care Fraud and Abuse: A Growing Concern

INTRODUCTION

Health care fraud and abuse are growing concerns globally, particularly in Nigeria, where millions of its citizens still struggle to access and afford quality healthcare. These frauds and abuses drain the resources provided to save lives. Health care fraud and abuse has become a silent epidemic, from inflating claims under the National Health Insurance Schemes (NHIS) to falsnormalisedifying and compromising patient medical records in both private and public hospitals. It is saddening that these acts by health workers have been normalized. Unfortunately, its effects go beyond just the financial losses but also lead to substandard and poor medical care, leaving the patients vulnerable; it undermines and erodes the trust and confidence of the public in medical practitioners and various health institutions, and the already inadequate resources are diverted from those who need them the most.

The Nigerian health care sector, which is already being faced with underfunding and inadequate infrastructure, cannot afford these losses. Addressing health care fraud and abuse goes beyond the protection of finances to the protection of lives. The question now is: what exactly is health care fraud and abuse? Health care fraud is defined as the act of intentionally and willfully submitting to defrauding any health care benefits program provided by government institutions or through the means of false pretence or misrepresentation by patients and health care providers. While abuse is defined as unintentional acts that are inconsistent with medical records and medical business practices.

1. TYPES OF HEALTH CARE FRAUD

Health care fraud and abuse happen in different ways which include:

• Billing for Services Not Rendered: This is one of the most common forms of health care fraud and it occurs when healthcare practitioners, hospitals, clinics and healthcare institutions falsify patient’s information or records or increase the number of health services provided and collect money for treatments, consultations and tests that were never done.[1] A notable example was when the Federal High Court, Uyo, Akwa Ibom State sentenced Dr. Bassey Goddy Usen, the Managing Director of Ceephass Diagonistic Clinic/Surgery to 14 years imprisonment for obtaining with intent to defraud the sum of N2,000,000.00 (Two Million Naira) for a service that was never rendered.[2]
• Upcoding: This involves hospitals and clinics billing higher for a more expensive medical treatment or service than what was actually provided.[3] Although upcoding cases are rarely documented in Nigeria, these happen every day in hospitals and clinics where health practitioners conduct treatments for instance N20,000.00 and patients are being given bill of N50,000 to pay. Or a doctor billing for a complex office consultation when it was just a simple consultation that was performed.
• Phantom Patients: This is a very critical issue in Nigeria, particularly within the NHIS. It is a type of health care fraud mostly referred to as ghost billing, where fictitious individuals, often referred to as ghost enrollees, are enrolled by the HMOs to the NHIS or health care in order to siphon funds without delivering any actual services or billing for services provided to ghost patients. This fraudulent act can result in loss and also affect health insurers negatively by reducing their benefits. A notable example was the NHIS removing 23,000 ghost enrollees fraudulently listed by the Health Management Organisations (HMOs) in the year 2017.[4]

2. IMPACT OF FRAUD ON PATIENTS AND THE HEALTH SYSTEM

• Cost Inflation: This is one of the most devastating effects of healthcare fraud and abuse in Nigeria. It is the artificial increase in healthcare finances due to fraudulent practices by healthcare providers that distorts the true cost of care. This is different from the inflation that arises due to economic factors such as global inflation, the fluctuating exchange rates, and Nigeria’s overdependence on exporting medical equipment.[5] In most cases, patients are intentionally billed for services not performed or given or are billed for expensive treatments when there are cheaper alternatives. This action is harmful to Nigerian citizens who are already struggling to afford health care and are saddled with limited financial resources. It goes beyond affecting the patients but also the government and sustainability of the Nigerian health system.  Fraudulent or phantom patients/billing is the main cause of this cost inflation; for instance, the NHIS recently uncovered 23,000 patients who are ghost enrollees, with N1000 each for monthly capitation.[6] This means that millions of naira is being derived from the government for ghost patients. Investigation by Premium Times also shows that medical doctors defraud patients of billions of naira through a fraudulent medical referral kickbacks scam. They also discovered that laboratories also inflate the prices of medical tests by 20% and even as high as 35%, which is paid to the doctors or hospitals that referred these patients. This act is commonly known as a rebate in the healthcare sector.[7] It is so unfortunate that these corrupt practices are deeply rooted in our healthcare sector in a country where millions of her citizens are struggling to pay for health care bills and also payment for medical diagnoses. A larger percentage of her citizens cannot even afford monthly checkups; in fact, Nigeria has one of the highest out-of-pocket (OOP) health expenditure rates in the world, more than 70% of total health expenditure in Nigeria is borne directly by households, meaning patients themselves pay the inflated costs resulting from fraud.[8] Yet medical costs are being inflated, and they are left to suffer and wallow in pain because of their inability to pay hospital bills. Cost inflation as a result of fraudulent activities does not only affect the government effort in providing accessible healthcare but also makes our health care sector overly expensive and ineffective. It is just an invisible means of tax on her citizens. It is real human costs, poorer access to care, declining trust in health institutions, and widening inequalities in a country where universal health coverage remains a distant goal. No wonder those who can afford it prefer to travel out of the country for better and more accessible healthcare.
• Reduced Quality of Care: Health care fraud and abuse does not only affect health care costs, but it also drastically reduces the access to quality of care afforded to patient care. These resources that are diverted reduce the level of resources and investments available for the public health system, on which most vulnerable populations are more reliant on. Resources drained from the health budget through embezzlement, fraud and corruption reduce the funding available for salaries, health services and maintenance, contributing to lower staff motivation, quality of care and declining service availability and use.[9] As resources are embezzled, the public system is deprived of funding, leading to longer wait times, lower vaccination rates, and deepened disappointment in health services. An evaluation mentions that a simple 10% increase in corruption corresponds with a 10–20% drop in vaccination rates, findings that confront reality and direct patient impacts.[10]

These deficiencies impact multiple areas: poorer health outcomes, lower vaccination rates, and avoidable diseases take a heavier toll. In fact, a global study stated that approximately 140,000 child deaths annually are linked directly to the fraud in our health sector, a reality that, though global, mirrors the challenges faced in settings with limited resources like Nigeria.[11]

• Finally, the systemic effect of frauds affects the entire healthcare delivery framework. When decision-makers lose funds through fraud, the health system cannot invest in basic needs, staff training, facility upgrades, essential medication, and thus fails to reach the standards of safe, effective, patient-centred care. This failure causes a lot of Nigerians to bypass primary and secondary facilities altogether, crowding tertiary centres and further straining the system.
• Loss of Trust: Healthcare fraud in Nigeria does not only deplete resources; it also erodes public trust, which is central to effective healthcare delivery. When patients encounter fraudulent billing, misdiagnosis, negligence, or corruption, they lose faith in the system. The majority of Nigerians already see public hospitals with doubts, mostly associating them with poor outcomes and mismanagement.[12]

In wider terms, Nigeria’s 2024 Corruption Opinion Index rating of 26 out of 100 and ranking 140th globally paints a blurry picture of institutional credibility. Even though the analysis is a slight improvement from what we used to have, it is an obvious reminder that public trust in governance, including the health sector, has declined drastically.[13]

The reduction in credibility goes beyond health to include distrust in public institutions. According to the 2025 social cohesion survey, which established that about 79% of Nigerians lack confidence in the judiciary this is to show the wider decline in public trust. Such immense distrust also affects the health sector, where people may refuse to seek care or comply with treatment procedures due to fear of malpractice or mismanagement.[14]

3. LEGAL AND ETHICAL FRAMEWORKS OF HEALTH CARE FRAUD AND ABUSE

There are different legal and ethical frameworks put in place to protect the healthcare industry from fraud and abuse. We have the anti-fraud laws, the whistleblower protection and the compliance requirements. These laws work hand in hand to detect fraudulent activities in the health sector. Health practitioners need to be well aware of these laws in order to be protected from any financial and ethical issues.

3.1. Anti-frauds laws: Many countries globally, including but not limited to Nigeria, have several anti-fraud laws for penalizing fraudulent officials, both government officials and the private sector. These laws are:

3.1.1. The 1999 Constitution of the Federal Republic of Nigeria: This is the most fundamental law in the country; it is the law from which every other law gained its validity. The 5th schedule of the Constitution, which set out the code of conduct of public officers, set out the ethical standards expected of them and also stated their prohibitions in order to avoid fraud and conflict of interest. It restricts public officers from accepting any kind of gifts, property, benefits or money for their personal use or on behalf of someone on account of anything done or omitted to be done in the discharge of their duties.[15] Also, no one should offer public officers monetary gifts, property and so on as a form of bribe for granting favor in discharge of their duties.[15]

3.1.2. The Economic and Financial Crime Commission (EFCC) Act: The EFCC act is the Act which established Nigeria’s anti-fraud agency. According to Section 46 of the EFCC Act, “financial and economic crime” is defined as a “non-violent criminal and illegal act committed with the objective of earning wealth illegally.”[16] The Act made it compulsory for the EFCC to tackle financial and economic crimes such as fraud, embezzlement, money laundering and so on within the public sector and financial institutions like insurance institutions. For instance, the ex-NHIS boss, Yusuf, was arrested by the EFCC for abusing his office by conferring undue advantage to himself.[17]

3.1.3. The Corrupt Practices & Other Related Offences Act: The function of the Act is to prohibit and penalizes corrupt practices and other related offences. It established the Independent Corrupt Practices and Other Related Offences Commission (ICPC), which is saddled with the responsibility of investigating and prosecuting violators of this act.[18] The Act generally prohibits the various acts of corrupt practices that arise from interactions or transactions involving public/ government officers and the general public or private individuals. The primary purpose of the Act is the prohibition of corrupt practices and bribery; however it also seeks to curb corrupt practices in private business transactions and interpersonal relationships among individuals and persons.[19] All these are also relevant to health care.

3.1.4. Money Laundering (Prohibition) Act, 2011 (Amended): This law applies when illegal proceeds are disguised or funnelled through transactions, as seen in high-profile NHIS fraud cases exceeding legal cash limits. For instance, The Federal High Court in Ikoyi, Lagos, on Thursday, convicted Olufemi Martins Thomas, a former Executive Secretary of the National Health Insurance Scheme (NHIS), and Kabiru Sidi, a Bureau De Change operator, of their involvement in fraud case involving more than $2 million in contravention of the Money Laundering (Prohibition) Act, 2011 as amended.[20]

3.2. Whistleblower Protection: it is important to note that as of today, Nigeria does not have a whistleblower protection Act even though there have been some whistle blower protection Bills proposed in the past, none of it makes into becoming an enacted law. However, there are Whistleblower Protection Policy which is an anti-corruption program that encourages private individuals, public servant, civil servants to voluntarily report information about fraud, bribery, looted government funds, financial misconduct, government resources, and any other form of corruption or theft to the Nigeria’s Federal Ministry of Finance.[21] A whistle-blower who gives out information about any funds mismanagement or tip about any stolen funds to the ministry’s portal is rewarded or entitled to 2.5%–5% of the recovered funds by the Nigerian government.[22] The policy was launched on December 21, 2016, by Nigeria’s Federal Government and facilitated through the Federal Ministry of Finance.[23] Between 2012- 2023, Nigeria government had recovered N83 billion, $609 million and 5.4 million euros in liquid assets through white blowing.[24]

3.3. Compliance Requirements: Hospitals, Clinics, insurers and health institutions are mandated to established and adhere to compliance programs put in place to monitor and prevent fraud such as regular auditing, training staffs on how to monitor irregularities and how to detect fraudulent activities and corrupt practices.

Health practitioners are ethically bound by the principles of honesty, Accountability and patient care which should be their priority. These are the values that fraud directly undermines.

4. HEALTH INSURANCE FRAUD

This is the major issue facing Nigeria’s health sector, particularly within the National Health Insurance Scheme (NHIS). It includes various deceptive practices like false claims, double billing and provider-patient collusion. These fraudulent practices are very common among healthcare practitioners who value financial gain over quality health care in the NHIS due to the lack of a robust and functional health information system and inadequate modern information technology infrastructure, which prevent fraud detection, information sharing and timely data processing and database creation between different stakeholders in the scheme.[25]

• False Claims: This form of fraud involves the creation and submission of claims by healthcare practitioners to health insurance institutions for healthcare services that were never rendered or for medications that were never given to the patient.[26] A typical example of these false claims is ghost patients, which is the submission of claims for health care services for patients that do not exist, are deceased, never received the service billed for or have changed providers.[27] These practices have raised a growing concern, particularly when healthcare providers bill for unrealistic services and create false claims to extort the health insurance scheme.
• Double Billing: This is another common health care insurance fraud. It is the form of health care fraud that involves health care providers billing multiple times for a single service in an attempt to receive payment more than once for the same service rendered.[28]
• Provider-patient Collusion: This is when both the healthcare provider and the beneficiary of the NHIS collude together to fabricate false claims where the health practitioner will be the one to benefit from the false claims.[29]

It is essential for us to know that fraudulent activities committed by healthcare providers account for the highest form of healthcare fraud in Nigeria and globally.[30] While the majority of the population of health providers is honest, however, the dishonest few can carry out fraudulent activities on a wider scale, leading to significant damage.[31] Some forms of health provider fraud, such as those involving medical transportation, surgeries, invasive testing, and certain drug therapies, can even expose patients to high physical risks.[32] Given that fraud models are continuously evolving as individuals seek new ways to evade detection, approaches for detecting and preventing fraud must always be adjusted and ready to rediscover fraudulent actions.

CONCLUSION

Healthcare fraud and abuse are not just financial crimes; they are ethical failures that endanger human lives and weaken the entire system. They increase expenses, diminish the quality of care, and erode public trust. In a developing country like Nigeria, where more than 70% of her citizens’ healthcare expenses are paid out-of-pocket and affordability of treatment is a challenge, fraudulent activities further worsen healthcare accessibility. This results in a system where corruption not only drains resources but also denies the vulnerable individuals who desperately need access to quality care.

To tackle this problem, Nigeria must strengthen its laws and regulations, enhance compliance, protect whistleblowers by implementing whistleblower laws, and advocate transparency and accountability among healthcare professionals. The impact of fraud is severe, resulting in avoidable deaths, untreated diseases and increased disparities. A recent case is the arrest of the ex-NHIS executive secretary for inflating the ICT budget from N4.9 billion to N8.7 billion; this suggests how resources meant to improve healthcare delivery are siphoned into personal pockets. Cases such as this emphasize how unchecked corruption threatens the very foundation of the health sector. Finally, the viability and reliability of Nigeria’s healthcare sector rely on restoring transparency, ethics, and trust because without them, affordable and equitable healthcare will remain inaccessible for millions. Combating healthcare fraud goes beyond financial issues; it is about safeguarding human lives.

REFRENCES

1. American Medical Compliance, ‘Common Types of Healthcare Fraud and How to Detect Them’ American Medical Compliance (2024) https://americanmedicalcompliance.com/general/common-types-of-healthcare-fraud-and-how-to-detect-them/ accessed 8 September 2025
2. Mattew Ogune, ‘Court Jails Medical Doctor 14 Yeats for N5m Fraud’ The Guardian (Abuja: 1 December 2020)
3. ibid
4. Taiwo Ojoye, ‘NHIS Removes 23,000 Ghost Enrollees from Health Insurance Scheme’ The Punch (29 March 2017) https://www.google.com/amp/s/punchng.com/23000-ghost-subscribers-enrol-for-health-insurance-scheme/%3famp accessed 9 September 2025
5. Green Research, ‘Investigating the Causes of Medical Inflation in Benue State: A Socioeconomic and Healthcare System Analysis’ Green Research https://greenresearchng.com/project/3709/INVESTIGATING%20THE%20CAUSES%20OF%20MEDICAL%20INFLATION%20IN%20BENUE%20STATE:%20A%20SOCIOECONOMIC%20AND%20HEALTHCARE%20SYSTEM%20ANALYSIS accessed 9 September 2025
6. Nicholas Ibekwe, ‘INVESTIGATION: Kickbacks For Referrals: How Nigerian Doctors, Hospitals, Diagnostic Centres are Defrauding Patients’ Premium Times ( September 14 2020)
7. O Awoyemi, A.A Makanju, et Al.., ‘A time series analysis of government expenditure and health outcomes in Nigeria’ Journal of Public Health in Africa (2023) (14) (7) 1409 https://pmc.ncbi.nlm.nih.gov/articles/PMC10481895/ accessed 9 September 2025
8. Rotimi Jayesimi, ‘Impact of Corruption in the Health Sector’ Nigerian Health Services (July 29 2015) https://www.nigerianhealthservice.com/post/2015/07/29/impact-of-corruption-in-the-health-sector accessed 9 September 2025
9. Ibid
10. C Agu, C. Nwokolo, etc al.., ‘Who Is Most Likely to Experience Corruption When Seeking Healthcare in Nigerian Healthcare Facilities?’ International Journal of Health Policy Management (2025) (14) https://pmc.ncbi.nlm.nih.gov/articles/PMC12257204/ accessed 9 September 2025
11. Anthonia Obokoh, ‘Nigerians dissatisfied with public healthcare service as satisfaction rate falls below 30% – Report’ Nairametrics (August 21, 2025)
12. Gabriel Ewepu, ‘2024 CPI: Nigeria ranks 140th out of 180 countries – TI’ The Vanguard (February 11, 2025)
13. Emmanuel Agbo, ’79 per cent of Nigerians lack trust in judiciary’ Premium Times (July 6 2025) https://www.premiumtimesng.com/news/top-news/805505-79-per-cent-of-nigerians-lack-trust-in-judiciary-report accessed 10 September 2025
14. The Constitution of the Federal Republic of Nigeria, 1999, Fifth Schedule.
15. Ibid
16. Section 46 of the EFCC (Establishment) Act
17. Ibid
18. Section 6(a-f) of the Corrupt Practices and Other Related Offences Act 2000
19. Ibid
20. Premium Times, ‘Court convicts ex-NHIS boss, BDC operator of $2.1 million fraud’ Premium Times (July 24, 2025)
21. Tukur Sani, ‘Expose corruption and make money as Nigerian Government adopts new whistle blowing policy’ Premium Times (December 21, 2016) accessed 10 September 2025
22. Ibid
23. C. Onuegbulam, ‘Whistle blowing policy and the fight against corruption in Nigeria: implications for criminal justice and the due process’ Nnamdi Azikiwe University Journal of International Law and Jurisprudence (2017) 8 (2): 174, 179 https://scispace.com/papers/whistle-blowing-policy-and-the-fight-against-corruption-in-292fe1nbn5 accessed 10 September 2025
24. Arise news, ‘Nigeria Recovers N83bn, $609m, €5.4m through Whistleblowing Policy in 6 Years’, Arise news (29th August 2024) https://www.arise.tv/nigeria-recovers-n83bn-609m-e5-4m-through-whistleblowing-policy-in-6-years/ accessed 10 September 2025
25. M. Alimi, Realtime National Health Insurance Scheme (RNHIS): Means To Achieve Health for All’ SSRN Electronic Journal (2016) (6) (2)https://www.researchgate.net/publication/350379565_Realtime_National_Health_Insurance_Scheme_RNHIS_Means_To_Achieve_Health_for_All accessed 10 September 2025
26. ibid
27. ibid
28. ibid
29. Travaille, D. Thornton, et al.., ‘Electronic Fraud Detection in the U.S. Medicaid Healthcare Program: Lessons Learned From other Industries’ (In the Proceedings of the Seventeenth Americas Conference on Information Systems) University of Twente Research Information (Detroit, Michigan August 2011)
30. M Musal, ‘Two models to investigate Medicare fraud within unsupervised databases’ Expert Systems with Applications (2010) (37) (12) https://www.sciencedirect.com/science/article/abs/pii/S0957417410005993?via%3Dihub accessed 10 September 2025
31. Ibid
32. ibid

Written By Ayegbusi Oluwafisayomi Evelyn

Source: BarristerNG