Why Whistleblowers Are Important for Medical Loss Ratio Fraud

The medical loss ratio (MLR) is a threshold imposed by the US government on healthcare companies to ensure that funds are allocated appropriately.

Insurance carriers are required to spend at least 80 percent of their premium funds on medical expenses and 20 percent on their salaries, administrative costs, and marketing.

Reporting the MLR entails returning money to the government, which is why there are companies that commit fraud.

Tracking these institutions one by one is a challenge for the authorities. That’s why whistleblowers are essential for catching those who violate the law.

Medical loss ratio fraud should be a significant concern for both the government and citizens because it involves the misappropriation of taxpayers’ money.

Here are the reasons why whistleblowers are important for tracking medical loss ratio fraud:

Watch Out for Fraud in Your Area

There are thousands of insurance and healthcare companies in the US, and the government cannot actively monitor them all at a given time.

As a local resident and taxpayer, one of your responsibilities is to keep an eye out for fraud in your city or town. Be vigilant and report any suspicious activities from these institutions.

These are some of the typical ways that medical loss ratio fraud occurs:

  • Paying for claims that, according to Medicare or Medicaid rules, should have been denied. This aims to puff up the cost of medical services.

  • Sending duplicate or excessive payments to insurance providers. Again, to falsely increase the amount spent on medical services.

  • Recording false data, like medical costs, to the government to puff up the MLR.

  • Misreporting revenue by hiding or misappropriating profits from one contract to the next.

  • Falsifying the cataloging of administrative expenses as the cost of claims.

Aid in Proper Allocation of Funds

The primary issue with misappropriating funds for Medicare or Medicaid is that these companies are putting taxpayers’ money into their corporate pockets.

Whistleblowers have the power to ensure that this financial resource is used for helping US citizens with their medical bills and health-related needs.

Despite being one of the most comprehensive healthcare systems in the world, the US healthcare system still had loopholes that insurance companies exploit.

While the government needs to guarantee the proper allocation of funds, whistleblowers can help expose insurance providers and carriers who don’t follow the law.

Return Tax Money to the Government

As mentioned above, reporting the MLR entails returning money to the government, which is why whistleblowers are required to file a writ of qui tam.

This type of lawsuit allows private individuals to aid in prosecuting an institution that commits medical loss ratio fraud.

The suit requires companies to return misappropriated taxpayers’ money to the federal government to resolve the claims.

Help Penalize Wrongdoers

Whistleblowers ensure that wrongdoers are punished for misappropriating taxpayers’ money.

With their exposé, whistleblowers make sure that these institutions pay for their fraudulent activities.

If you’ve courageously decided to fight back against MLR fraud as a whistleblower, here are some factors that you should consider when filing a whistleblower report:

  • Evidence – If you have an inkling that a company is committing MLR fraud, you should try to gain as much proof as you can so that you can provide a comprehensive report to the authorities. Providing extensive details lessens the work that the government has to do in uncovering the illegal activity conducted by an institution.

  • Type of Issue – As a whistleblower, you must also determine the significance of the problem. Falsifying reports may be of lesser weight than an issue that harms the safety of the patients. Identifying the gravity of the crime can help authorities immensely in their investigation.

  • Your Attorney – You must find a reliable lawyer to help guide you through the process of whistleblowing. With their legal counsel, you can navigate through the ordeal with confidence because you have an expert backing you.

  • Your Anonymity – While you may have filed the lawsuit as an anonymous, concerned citizen, you shouldn’t be too dependent on this status, especially when the case is presented to the court. Prepare yourself mentally and emotionally to take the stand and provide testimony.


Whistleblowers are essential for uncovering medical loss ratio fraud because of the sheer volume of companies that are being monitored.

They are essential in keeping the healthcare system free from scheming insurance companies. So taxpayers can have access to proper and more affordable healthcare.

Whistleblowers ensure that wrongdoers are prosecuted and required to return the money that they gained illegally back to the government.

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