From 2019 to 2020, the estimated rate of improper Medicare payouts dropped from 7.25% to 6.27%. That still means the Medicare program pays out more than $200 billion a year due to these fraudulent or abusive claims, but there is a downward trend due to increased education at the service provider level. The decrease likely represents a reduction in unintentional overbilling, but there’s still a lot of intentional Medicare fraud happening annually. Knowing how to protect yourself and assist the government in combating fraud and abuse can help reduce the rising cost of healthcare for all beneficiaries.
How to Report Medicare Fraud and Abuse
Call your provider if you notice charges on your medical bill that don’t look right. They may have an explanation for the charges or remedy the mistake they may have made. Continue to monitor your bills for any for further mistakes or possible red flags that fraud maybe occurring.
You can contact Medicare directly 1-800- MEDICARE (1-800-633-4227) at any time to report fraud or abuse without having to communicate with your provider.
Original Medicare beneficiaries can also submit a hotline complaint to the Office of Inspector General. For fraud or abuse related to an Advantage or drug plan, beneficiaries can call the Investigations Medicare Drug Integrity Contractor at 1-877-7SAFERX (1-877-772-3379).
Have your Medicare number, the name of the provider and information regarding the services or supplies in question when making your call. It is also recommended that you have the Medicare Summary Notice or your Explanation of Benefits available to reference as you may need to report the amount that Medicare paid to the provider.
What Happens When You Report Medicare Fraud or Abuse?
The answer depends on a variety of factors, including whom you filed the report with and the details of your claim. There are two agencies that respond to Medicare fraud and abuse reports:
- Centers for Medicare and Medicaid Services (CMS)
- Office of Inspector General (OIG)
CMS is the first line of defense for most reports. They will determine if an error was made by a provider, or an act of abuse or fraud is likely. They assign someone to investigate the issue in the case of a believed error or a cycle of abuse. For suspected fraud, the case is often assigned to an OIG investigator.
OIG investigators can complete deeper investigations into potentially fraudulent cases. They may also work with the U.S. Attorney’s Office or FBI. When fraud is verified, the following consequences are often assessed to providers and other guilty parties:
- Criminal prosecution
- Civil prosecution
- Administrative sanctions
- Monetary penalties
- Corporate integrity agreements
Medicare Fraud vs Medicare Abuse – What’s the Difference?
The difference between Medicare fraud and abuse is in the intention behind the act. While both are a drain on the Medicare system that can end up costing all beneficiaries more, one act is intentional while the other is not.
What is Medicare Fraud?
Medicare fraud occurs when invoices for illegitimate services or supplies are knowingly presented to Medicare with the intention of receiving undeserved payment. What makes it fraud is that the medical providers submitting the invoices are aware of the inaccuracies and intentionally act to deceive the Medicare program.
Medicare fraud can happen at the invoice level, so beneficiaries are often unaware unless they later check records to see what was charged to Medicare. In some cases, patients are put through unnecessary testing and procedures for the sole purpose of charging Medicare for the services. In other cases, providers choose billing codes based on payouts rather than actual services delivered.
What is Medicare Abuse?
Medicare abuse occurs when medical service providers unknowingly bill Medicare for services or supplies that were not legitimately delivered to a patient. It often happens as a simple mistake when someone uses the wrong billing code unintentionally or due to a lack of knowledge.
While there is no intention to defraud the Medicare system in these cases, there is still a significant cost to the system. That’s why Medicare providers can still face the consequences of inaccurate billing if abuse is caught.
Medicare Fraud and Abuse Examples
- Billing for services not delivered to patients (phantom billing)
- Billing for higher complexity level services than the services provided to patients (upcoding)
- Billing for supplies not delivered to or needed by patients
- Offering beneficiaries medical plans that aren’t approved by Medicare
- Double billing for products and services
- Charging for a series of individual services that should bill as a bundle (unbundling)
- Billing the beneficiary directly instead of abiding by Medicare’s participating provider agreement
- Giving patients supplies or services they don’t need
- Misrepresentation of facts on Medicare invoices (patient name, diagnosis, etc.)
- Bribing beneficiaries to receive their Medicare subscriber number
- Waiving deductibles and co-insurance on a routine basis to attract new patients
- Accepting kickbacks from pharmaceutical representatives or device suppliers in exchange for recommendation to Medicare patients
- Billing Medicare for services delivered to someone who is not a beneficiary
Medicare Fraud and Abuse vs Medicare Scams
Fraud and Abuse involve either providers, their staff members, or patients misrepresenting their identity to providers in order to obtain services fraudulently. Medicare beneficiaries can also accept money or other payment in exchange for allowing a non-beneficiary to use their Medicare card for payment.
Scams are conducted by people outside the medical system who prey on beneficiaries directly. In most cases, scams are designed to collect Medicare subscriber numbers from unsuspecting beneficiaries. They may also try to obtain social security numbers or banking information. That information is used for identity theft, which may include receiving Medicare services fraudulently.
Medicare scams are often carried out over the telephone. Beneficiaries receive calls from people falsely representing themselves as Medicare representatives. Many beneficiaries report scammers threatening to deactivate their Medicare benefits if they don’t provide the information requested.