The Medicare program provides health care benefits to Americans aged 65 and older and to younger people with some disability status. On average, Medicare covers about half of the healthcare charges for those enrolled. According to the American Association of Retired Persons (“AARP”), approximately 44 million beneficiaries are currently enrolled in the Medicare program. This is expected to rise to 79 million by 2030. Along with the increase in enrollment and spending comes an increase in the risk for fraud within the program.

Medicare fraud involves knowingly submitting, or causing to be submitted, false claims or making misrepresentations of fact to obtain a federal health care payment for which no entitlement would otherwise exist. The AARP estimates that approximately $60 billion was lost in 2017 as a result of Medicare fraud. These losses are bigger than some of the federal government’s programs, such as Homeland security, with a budget of approximately $40 billion.

How is it Done?

According to Centers for Medicare & Medicaid Services (“CMS”), the following are several examples of common Medicare fraud schemes:

• Billing for services not provided: Providers will bill 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 twice for the same procedure or visit.
• Billing for phantom visits: Billing for a service that was never provided or for a visit that never happened.
• Billing for unnecessary services or tests: A provider fabricates documents and creates fake diagnoses to be able to perform unnecessary services, subsequently billing for these services.
• Billing for more expensive procedures than were actually performed: Billing for a more complex procedure when a simple one was performed.
• Misusing codes on a claim: Upcoding or unbundling codes.
• Accepting kickbacks: Accepting payment for referral of patients.

Medicare Fraud in the News

Just this month, a Fort Myers doctor pleaded guilty to two counts of conspiracy to receive health care kickbacks, and could face up to 10 years in prison, as well paying a fine of $2.8 million. The doctor started referring patients to a medical equipment provider, and had an agreement with them that he would get paid for the referrals. The kickbacks were paid as checks to the doctor’s wife, who was given a phony position within the company to cover up the arrangement. In addition to the kickbacks, it was discovered that the doctor was submitting claims for tests that were not medically necessary.

In May 2018, a Texas doctor was being investigated for a case involving approximately $240 million in claims that were based on fraudulent statements submitted to health care benefit programs, resulting in $50 million paid to the doctor.

The Medicare Fraud Strike Force, first established in 2007, is a multi-agency team of the United States federal, state, and local investigators who help combat Medicare fraud through data analysis and increased community policing. The Force is coordinated by the Department of Justice and the Department of Health and Human Services. Just in the month of May 2018, the Force convicted a doctor in an $8.9 million fraud scheme, another for $8 million, and one for $3.6 million.

While teams of individuals are out there fighting the fraud, it is important to know the warning signs to help prevent the fraud before it occurs.

How to Prevent the Fraud

In an effort to reduce fraud, new Medicare cards are being released this year. The cards replace Social Security Number-based Medicare numbers with a new, unique, personalized Medicare Number, known as the Medicare Beneficiary Identifier. Each person with Medicare will have his or her own number, which is randomly assigned. This change offers better safeguards of important health and financial information for beneficiaries. This will make it harder for criminals to use social security numbers to falsely bill Medicare for services and benefits that were never performed.

In addition to the extra protection offered by the new cards, Medicare.gov suggests the following tips to help prevent fraud:

• Protect your Medicare card. Treat it like you would treat your credit card for security purposes.
• Remember that nothing is ever “free”. Don’t accept offers of money or gifts for free medical care.
• Ask questions: If you feel that a recommended procedure or treatment is unnecessary, you need to speak up.
• Educate yourself about Medicare. Know your rights and what can or cannot be billed.
• Use a calendar to record all of your doctor’s appointments and what tests you have. Reconcile these to your Medicare statements to ensure accuracy.
• Be wary of providers who tell you that the item or service isn’t usually covered, but they “know how to bill Medicare” so they will pay for it.

How to Report Suspected Fraud

If you suspect fraud, Medicare.gov recommends calling 1-800-MEDICARE, reporting it online to the Office of the Inspector General, or calling the Office of the Inspector General Fraud Hotline at 1-800-447-8477.

It is recommended that you have the following information at the time of reporting to help investigate the situation: provider’s name and any identifying information, the service or item your questioning, the date the service or item was supposedly given or delivered, the payment amount approved and paid by Medicare, your name and Medicare number, and the reason you think Medicare should not have paid.

Keep Fighting

The federal government has made great strides in recovering monies lost to fraud while trying to reduce the fraud that is perpetrated within the Medicare program. Even if you are not currently receiving benefits from the program, you should be concerned as you are paying into the program through your taxes. The more fraud there is, the higher the likelihood that the taxes will go up. The more awareness that is created around best practices and what to look out for, the better off we are in our efforts to prevent it from occurring.

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