Fraud means an intentional deception or misrepresentation made by a person with the knowledge that the deception could result in some unauthorized benefit to himself or some other person. It includes any act that constitutes fraud under applicable federal or state law (42 C.F.R. § 455.2).

• Example: Sam’s pharmacy bills for a prescription medication that Sam did not receive. The pharmacy knew Sam did not receive the medication, but the pharmacy billed for the medication anyway.

Waste means an overutilization of services or other practices that directly or indirectly result in unnecessary costs. Waste is generally not considered to be caused by criminally negligent actions, but rather the misuse of resources.

• Example: Rachel’s doctor consistently prescribes a high-priced medication for her. Her doctor is not aware of a generic alternative that is less expensive and available in the formulary.

Abuse means provider practices that are inconsistent with sound fiscal, business, or medical practices, and result in an unnecessary cost to the Medicaid program, or in reimbursement for services that are not medically necessary or that fail to meet professionally recognized standards for health care. It also includes beneficiary practices that result in unnecessary cost to the Medicaid program (42 C.F.R. §455.2).

• Example: Jonathan went to his doctor to remove a wart on his finger. Jonathan’s doctor removed the wart then also obtained x-rays and performed a comprehensive physical examination that were unnecessary.