Avoid and Report Medicare Fraud and Abuse

Fact Checked

Medicare fraud is a serious issue that can cost taxpayers billions of dollars and put beneficiaries’ health at risk. In 2019 alone, there were almost $29 billion of improper payments for Medicare Private Fee-for-Services (PFFS), representing 7.25% of all payments, according to the Centers for Medicare & Medicaid (CMS). While most Medicare providers are ethical individuals who try to provide high-quality care, avoiding and reporting Medicare fraud and abuse is everyone’s responsibility.

What you should know:

  1. Medicare fraud involves knowingly misbilling the Medicare system for medical services or items or engaging in incentive schemes to get patient referrals.
  2. To prevent Medicare fraud, always review your Medicare bill and statement of benefits.
  3. Report suspected Medicare fraud immediately to the appropriate government agency.
  4. Health care providers can avoid accidentally committing Medicare fraud with diligent billing practices and by keeping their licenses current.

Medicare fraud occurs when a practitioner knowingly bills the Medicare system for products or services that were not used by the beneficiary, is involved in reward schemes for such products or services or makes illegal referrals for designated health services. To combat fraud and abuse, it’s important to know what Medicare fraud looks like, how to protect yourself and how to report Medicare fraud.

What are examples of Medicare fraud?

“Unfortunately, there are numerous types of Medicare fraud that one should be familiar with,” says John Norce, president of Medicare assistance firm MedicarePortal. Examples of Medicare fraud include:

  • Overbilling for services rendered
  • Billing for products or services not given
  • Ordering unnecessary medical items or services for patients
  • Billing for Medicare appointments in which the patient did not show up
  • Paying for patient referrals

Many overbilling cases involve the healthcare organization or hospital charging twice for services only performed once, says Chuck Czajka, founder of Macro Money Concepts in Stuart, Florida. Overbilling can also take the form of charging for services that were never delivered. This is why it’s important to always review your Medicare summary notices and statements to make sure there are no extraneous items listed.

“Another example (of Medicare fraud) would be upcoding of a medical procedure where a provider submits billing codes for a more advanced procedure than what was actually delivered,” Norce says.

Medicare uses Evaluation and Management (E/M) codes to determine how much to reimburse physicians for their services. Physicians are meant to select the appropriate code to represent the services given during a patient visit. Medicare upcoding fraud occurs when a practitioner knowingly submits an incorrect code. This could be as simple as billing a follow-up visit as a new patient visit, which Medicare reimburses at a higher rate than new patient visits. It could involve adding the -25 modifier to a bill, which would indicate there was another separate service provided that day when no such additional service was rendered.

How can healthcare fraud and abuse be prevented?

Patients play an important role in preventing healthcare fraud and abuse. “The best recommendation to prevent fraud is to be involved in your health care and review all your explanation of benefits and provider bills,” Norce says. “Being diligent in reviewing your care and claims as they happen is the best habit to develop in preventing fraud,” as it will be easier to match the bills when your care is fresh in your memory.

“Medicare.gov recommends that you write down the dates you receive health care services on your calendar and save all of your receipts and statements from healthcare providers,” Czajka says. “That way, when your Medicare processes your claims, you’ll be able to verify you weren’t charged for services or products you didn’t receive.”

Norce recommends all his clients who are on Original Medicare set up a MyMedicare.gov account. This will allow you to see your explanation of benefits in real time, he says. For Medigap, Medicare Advantage or Part D beneficiaries, he recommends creating an online account with your plan provider that will let you do the same process of matching bills, payments and claims.

“If you see something you don’t understand or seems odd, the first step is to call the provider and request an explanation of services and costs,” he says.

Medicare fraud can also involve con artists attempting to steal your identity by obtaining your Medicare Number or other personal information. To protect yourself from such Medicare fraud, Medicare.gov says to “guard your Medicare card like it’s a credit card.”

“As a good rule, do not share your Medicare information with anyone over the phone,” Norce says. “There are numerous phone scams that will request your Medicare information asking you to pay for genetic testing, durable medical equipment or COVID-19 testing and vaccines.” These scams can come via phone call, email, or text message.

“Unless you have arranged for your providers to email and text you, avoid responding to anything outside of these trusted providers,” Norce says.

Medicare will never contact you to get your Medicare number or personal information without your prior permission. Nor will they call you to sell you anything or enroll you over the phone unless you called them first. Medicare will never visit you at home, either.

There are also Medicare Anti-Fraud and Abuse Partnerships, which are voluntary public and private partnerships that work to fight Medicare fraud and abuse, recoup taxpayer funds, and improve the quality of health care while reducing costs. “These proactive agencies share information through fraud detection and data and information sharing,” Czajka says. They include the Health Care Fraud Prevention Partnership (HFPP), Centers for Medicare & Medicaid Services (CMS), Office of the Inspector General (OIG), Health Care Fraud Prevention and Enforcement Action Team (HEAT) and General Services Administration (GSA).

You can call the Senior Medicare Patrol program at 800-938-8885 to learn more about protecting yourself and spotting fraud.

How do you anonymously report Medicare fraud?

“If you suspect Medicare fraud or abuse, it should be reported right away,” Czajka says. Medicare beneficiaries can report fraud by calling the CMS hotline at (800) MEDICARE or the OIG hotline at (800) HHS-TIPS. Medicare providers can also use the OIG hotline or contact their Medicare Administrative Contractor (MAC).

Medicaid beneficiaries or providers should contact the OIG hotline or your Medicare State Agency, which is listed in the National Association of Medicaid Fraud Control Units (NAMFCU).

“Other entities you can call are your State attorney general, local law enforcement, state insurance departments, and state Medicaid Fraud Control Units,” Norce says.

You can also submit a complaint online through the OIG website. These complaints can be made with or without your personal information. If you choose to submit an anonymous complaint, just know that the OIG won’t be able to investigate your complaint as a whistleblower retaliation complaint and may hinder it from thoroughly reviewing and resolving the issue.

The OIG does not address all types of complaints, however. Complaints the OIG investigates include:

  • False or fraudulent claims submitted to Medicare or Medicaid
  • Medicare identity theft
  • Nursing home or other long-term care facility abuse or neglect
  • Kickbacks or referral inducements by Medicare or Medicaid providers
  • Complaints directly relating to the misconduct or crime of HHS employees, grantees, or contractors

Complaints the OIG does not investigate include:

Before making a complaint, make sure you have the necessary information readily available. “You will need to provide the name of the doctor or health care professional that you are reporting, the service or item you believe is fraudulent, the date this occurred and your reasoning as to why Medicare should not have paid,” Czajka says.

The OIG also asks that you have the provider’s contact information, such as address, telephone number, and email, if available. Likewise, if there is someone who can corroborate your claim, have that individual’s name and contact information nearby. You should also be prepared to submit any supporting evidence with your report, such as e-mail communications, billing records, documents, or photographs.

How can you avoid committing Medicare fraud accidentally?

Not all Medicare fraud is intentional. “Sometimes, health care workers, doctors, or even patients, commit Medicare fraud without knowing it,” Czajka says.

A simple billing error or mistake can lead to inadvertent fraud and prompt an investigation. “This is why paying close attention to the details on your bill is so important,” he says.

To avoid committing Medicare fraud accidentally, practitioners should be diligent in their billing processes. “If you mismanage or have sloppy business practices, it could lead to trouble ― even if not intentionally done,” Czajka says. “If a medical practitioner receives a payment and they realize it might be a duplicate billing, it is important to return the overpayment.” Practitioners generally have 60 days to remedy the situation.

Medicare providers should also be careful to record and describe all services rendered and keep licenses up to date. Billing a client with an expired license can also lead to fraud accusations.

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Medicare consultant and expert, seniors advocate, and author

Ron Elledge is an accomplished Medicare agent, planner, and author. Elledge earned a bachelor’s degree in Bible theology from International Seminary and spent 30 years in pastoral ministry. He began his current career in insurance with a specialty in Medicare in 2008 and has since authored “Medicare Made Easy: What Expats, Frequent Travelers and You Need to Know” and is often a featured speaker at the International Living conferences. Elledge is a contributor to International Living, supporting Medicare beneficiaries with articles, podcasts, and Q&As.

“A licensed seniors market insurance agent in Arizona and New Mexico, Elledge has helped thousands decipher the intricacies of Medicare rules and regulations, enabling them to make educated selections for their health care needs. As a world traveler with his wife, Shelli, Elledge specializes in Medicare for expats and frequent travelers. He’s up to date with Medicare regulations, coverage options, and enrollment protocols and is fervent in his resolve to present trustworthy data on this confusing and often maligned program.

“By obtaining dependable details on how to read their Medicare options, recipients can plan for it correctly and make the best choices,” says Elledge. “These choices often make a huge financial and emotional difference in their futures. When Medicare is correctly utilized, it becomes a powerful financial and medical tool for all who qualify.”

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