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The Truth About Medicare Fraud And You

You have likely heard the term “Medicare fraud,” but what does it really mean? The simple definition is inappropriate and illegal billing of Medicare by a health care provider. Some general examples include:

  • Billing for equipment or services that were never provided.
  • Billing for equipment or services that were not medically necessary.
  • Billing twice for the same services or equipment.
  • Using billing codes that are different than the ones appropriate for the services provided in an attempt to increase reimbursement.

Several specific examples show the determination of those whose actions are totally fraudulent and designed solely for the purpose of gaining money at the expense of Medicare and its participants. In one case, four people sent glucose monitoring devices to senior citizens across the country who did not need the devices and had not requested them. Medicare was then billed for the devices. The senders of the device were paid more than $22 million before Medicare detected the fraud.

Patient “recruiters” have been known to offer money to senior citizens who are eating at a soup kitchen or spending time at a homeless shelter. All they ask in return is for the senior's Medicare patient number. Then, the numbers they accumulate are used to bill Medicare for services and equipment that were, of course, never provided.

How Much Does Medicare Fraud Cost Taxpayers?

The annual cost due to Medicare fraud is not known. The system has so far not differentiated between providers who knowingly submitted fraudulent claims from those who just made billing errors. In 2011, for Medicare and Medicaid combined, approximately $65 billion was improperly paid to health care providers, but how much of that was directly due to fraud has not been determined.

In many cases, the fraud is not detected until payments have been made to the provider. One Los Angeles doctor billed Medicare $23 million for home health services, including wheelchairs, which were never provided. In Florida, a pharmacist received $1.6 million for prescription drugs that were never even dispensed.

Although a definitive amount of the loss cannot be ascertained, the Centers for Medicare & Medicaid Services (CMS) estimates the loss to Medicare is approximately $60 billion a year. CMS is now using fraud investigation software to detect possible fraudulent billing practices for referral to case management for further investigation.

How to Protect Yourself from Medicare Fraud

Although there are some persons covered by Medicare due to their unique circumstances who are not senior citizens, the majority of those covered by Medicare are age 65 and therefore targets for the fraudsters. If you are a senior citizen who uses Medicare, the federal government has some tips to help in the fight against Medicare fraud:

  • Do not give your Medicare or Social Security numbers to anyone but authorized health care providers. Remember that Medicare will never call you or approach you personally to try and sell any service or product.
  • Review your Medicare summary notices and look for:
    • A charge for services not performed
    • Products you did not purchase or were not offered by your health care provider
    • Duplicate billing

Do not hesitate to ask your health care provider for clarification of any questionable billing statement. If you suspect fraud, report it to the federal government so it can conduct a further investigation.


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Focused on the real-world needs of organizations handling investigations, Column Case Investigative is a workflow-driven, web-based case management solution for investigation management. Best practices case management features such as access control, activity tracking, reporting and compliance help your organization be more organized, efficient and profitable in managing investigations.