The Daily Record, May 2015

The Medicaid program provides health care benefits to low-income families who either have no medical insurance or have inadequate medical insurance. According to a report published by the State Healthcare Spending Project, a collaboration between Pew Charitable Trusts and the John D. Catherine T. MacArthur Foundation, Medicaid is the largest health insurance program in the United States, covering care services for over 66 million low-income Americans. In 2014, spending on Medicaid totaled approximately $488 billion. Over the last decade, the program has seen significant increases in enrollment and spending due to tough economic times. Along with the increase in enrollment and spending comes an increase in the risk for fraud within the program. Medicaid Fraud involves knowingly misrepresenting the truth to obtain unauthorized benefits. Abuse includes any practice that is inconsistent with acceptable fiscal, business or medical practices that unnecessarily increase costs. In 2014 alone, the Office of Inspector General (“OIG”) reported that at both a federal and state level, 16,464 Medicaid investigations had been opened, of which, 13,192 were fraud related.

How is it done?

According to the National Association of Medicaid Fraud Control Units, the following are several examples of common Medicaid fraud schemes:

• Billing for services not provided: Providers billing for services that were not performed, or continue to bill for services for a patient who is no longer at a facility or has passed away.
• Double billing: Billing both a private insurance company and Medicaid, or sometimes the recipient of the services, for the same treatment.
• Billing for phantom visits: Billing for a service that was never provided or for a visit that never happened.
• Inflating billing hours: Billing more hours than actually spent with a client. In some cases, providers billed more than 24 hours of treatment in one day.
• Falsifying credentials: Misrepresenting qualifications to bill Medicaid for services the individual is not allowed to perform.
• Substitution of generic drugs: Billing Medicaid for the cost of a brand-name drug when a generic was provided to the patient.
• Billing for unnecessary services or tests: A provider fabricates documents and creates fake diagnoses to be able to perform unnecessary services, subsequently billing Medicaid for these services.
• Billing for more expensive procedures than were actually performed: Billing for a more complex procedure when a simple one was performed.

Medicaid Fraud in the news

An article recently published in the New York Times detailed a case of nine doctors who were accused of defrauding Medicaid. The doctors were purportedly recruiting homeless people who had valid Medicaid cards, putting them in vans, and taking them to medical clinics around New York City. While at the clinics, the homeless people were subjected to hours of unnecessary tests related to fake diagnoses. In return for their time, the homeless people were given a free pair of sneakers. The article noted that when patients arrived, they would typically be seen first by a podiatrist, who would then refer the patient to other doctors who were part of the scheme, including psychiatrists and pain management specialists. Other scams that were recently in the news involved dentist and doctors billing for services that were never provided and a mother-daughter duo billing for in-home care services for individuals who were on a Caribbean cruise during the time they claimed they were providing services. Experts estimate that fraud within the Medicaid program eats up at least 10% of the program’s total cost each year. This cheating has been able to go on for years due to the lack of program oversight and cuts in state budgets, removing the individuals in oversight roles from their positions. As this program continues to grow nationwide, states are finally starting to realize that something needs to be done to protect this program from fraud. 

How to prevent the fraud 

Through the investigations performed by the Office of Inspector General during 2014, approximately $2 billion was recovered. New York State’s Office of the Medicaid Inspector General reported recently that they have recovered $1.7 billion themselves in the last three years. In addition to the investigations completed by the OIG and the individual states like New York, changes made through the Affordable Care Act also contain several provisions to help the states fight fraud, including:

• Information Sharing – States are required to share information about providers whose billing privileges have been revoked, so they are not allowed into other state Medicaid programs.
• Heightened Scrutiny – New screening and enrollment requirements have been implemented for some Medicaid providers such as home health care attendants and durable medical equipment providers. These higher risk providers will be subject to higher levels of scrutiny, including licensure checks, fingerprinting, criminal background checks, and medical site visits to confirm legitimacy and location.
• Payment Freezes – States have the ability to freeze payments to Medicaid providers if there is a credible allegation of fraud.
• Tough Sentencing – The law has increased federal sentencing guidelines for healthcare fraud by 20-50% for crimes with over $1 million in losses.

While investigations done by the OIG and more stringent state requirements will help reduce the risk of fraud, it is also important for individuals to educate themselves on the warning signs for Medicaid fraud. The U.S. Department of Health and Human Services makes the following recommendations for individuals to help protect themselves:

• Do not give your Medicaid card number to strangers.
• Keep records of your doctor visits, tests, and procedures.
• Review your billing statement for charges for something you did not get, billing for the same procedure twice, or billing for services that were not ordered by your doctor.
• Ask questions if you do not understand your bill, do not think you received a service that was billed, or feel that the service was unnecessary.

How to report suspected fraud

If you suspect fraud, the Center for Medicare and Medicaid Services (“CMS”) recommends reporting it to the Program Integrity contact at the State Medicaid Agency for your individual state. The CMS’s website, www.cms.gov has state by state reporting contacts and includes contact information for the State Medicaid Agencies. In addition to this, reports can also be made directly to the Office of Inspector General National Fraud Hotline at 1-800-447-8477. The CMS recommends having the following information available to help investigate the situation: name of the Medicaid client, client’s Medicaid card number, name of the doctor, hospital, or healthcare provider, date of service, and amount of money Medicaid approved and/or paid.

Keep fighting

The federal government has made great strides in recovering monies lost to fraud while reducing the fraud that is perpetrated within the Medicaid program. Even with tougher enforcement, states must continue to find ways to keep fraud prevention in the front of the mind’s of providers and consumers.