Medicare Fraud: How to Spot it, and What to Do

medicare fraud infographic

This article was updated on May 25, 2021. 

Medicare fraud and abuse have become a costly problem in the U.S. With more than 4.5 million Medicare claims processed per day, it is easy for fraudsters to hide their actions in the system, costing more than $80 billion dollars each year and taking away money from the system. Though it can certainly occur anywhere, some hotspots for Medicare fraud are Miami, Detroit, Los Angeles, and southern Texas.

Fraud cases have an adverse effect on individuals. “If insurance companies pay out of fraudulent claims, then they experience a loss,” a Health and Benefits Manager at Hollis & Burns, Inc. said, at the request of remaining anonymous. “That, in turn, impacts the consumer because the insurer will increase their rates to make up for the fraudulent claim.”

Types of Medicare Fraud

Medicare fraud is simply an instance of illegitimately collecting money from the Medicare program. It can take the form of:

Phantom (or ghost) billing – when the care provider bills Medicare for procedures that were not performed or for equipment that was not needed
Patient billing – when the patient gives his or her Medicare number to be billed for services not rendered or that they didn’t need (the patient is also at fault here)
Upcoding and unbundling – inflating bills by using a false code that indicates the patient needed expensive treatments that they didn’t really need

Other types of medical billing fraud and abuse include:

Cloning – copying information from another patient’s file to appear as if a more thorough examination was done
Inflated hospital bills – when huge overcharges occur for medical procedures or equipment
Repeat billing – billing twice for the same procedure, supplies, or medicine
Length of stay – when patients are charged for extra days in the hospital or other facility
Time in OR – when the hospital charges based on the average time needed to perform an operation, not the actual time
Keystroke mistake – when a care provider enters incorrect codes, resulting in overcharges

Stopping Medicare Fraud

The Centers for Medicare and Medicaid Services (CMS) are now using predictive modeling technology (similar to what credit card companies use to prevent suspicious activity) to try to prevent fraudulent claims before they are paid. Voice recognition technology has even been used to make sure at-home care providers are actually present to provide services. But even with these technologies in place, everyone must be vigilant to prevent this rampant problem from continuing.

CMS removed all social security numbers removed from Medicare cards in 2019 to help combat any fraudulent action. What else can you do? recommends never giving out your Medicare number to receive a free offer or gift, and to always check your Medicare statement for errors. The Health and Benefits Manager at Hollis & Burns, Inc. agrees. She says, “Keep your information on lockdown. Limit what information you share.” also lists some very helpful Dos and Don’ts for preventing Medicare fraud.
Call the hotline 1-800-MEDICARE to report any instances of fraud; you may even be eligible for a reward. To learn more about Medicare fraud cases, visit the Medicare Fraud Strike Force.

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