Medicare Fraud

2014 Medicare and Medigap Updates

Medicare Fraud

Medicare fraud is a term which refers to an individual or company that collects Medicare health reimbursement under false pretences. A substantial amount of money is lost every year from the Medicare Program as a result of these types of fraudulent activities. It should be noted that many Medicare payment errors are simply mistakes and not the result of physicians, providers or suppliers trying to take advantage of the Medicare system.

The reason that the Medicare system is a target for fraud is because the whole program is based on an ‘honor system’ of billing. This system was originally set up to help doctors supply the needy with medical services. Unfortunately there are not many safeguards in place to eliminate false claims, particularly as Medicare aim to pay all claims quickly and smoothly.

The most common types of Medicare Fraud are as follows:

Phantom Billing: In this situation the provider sends bills to Medicare for procedures or medical tests that have not taken place or are not necessary.

Patient Billing: A patient who is involved in the scam provides his/her Medicare number in exchange for money. The provider bills Medicare for an imaginary reason and the patient lies by stating that he/she has received the treatment.

Upcoding Scheme and Unbundling: This is when bills are inflated by the use of a billing code which states that the patient needs expensive treatments.

Medical equipment used in the home to help the patient have a better quality of life is particularly susceptible to this kind of fraud. In this situation, scammers charge Medicare for equipment such as wheelchairs or oxygen tents many times over without actually delivering the equipment to an actual person.

More recently Medicare fraud has focussed on HIV/AIDS infusion injections. These injections are very expensive, sometimes costing hundreds or even thousands of dollars per injection. Enlisted patients are actually injected with a common solution such as saline but Medicare is billed as if the expensive HIV/AIDS injection was given.

Defendants convicted face very still penalties with the sentence depending on the amount of the fraud. The penalties include a significant amount of time in prison, fines, a requirement to pay back the sum defrauded and deportation of the defendant is not a US citizen.

In 2007 the Medicare Fraud Strike Force was formed in Miami Florida and was quickly copied in other cities and in 2009 a new interagency ‘Health Care Fraud Prevention and Enforcement Action Team (HEAT) was created to fight Medicare Fraud.

The first ‘National Summit on Health Care Fraud’ was held in January 2010 to identify and discuss new and innovative ways to eliminate fraud, waste and abuse in the United States health care system. This high-level meeting was the first time that the private and public sectors along with law enforcement had gathered together and was part of President Obama’s efforts to fight health care fraud.

In July 2010 the Medicare Fraud Task Force charged 94 people, including doctors, medical assistants and health care company owners for allegedly submitting a total of $251 million in fraudulent Medicare claims.