Medicare Fraud and Scams
Medicare fraud is a crime that happens when someone knowingly lies to Medicare to receive a payment they’re not entitled to or to receive more money than they should for a service or product. Doctors, hospitals, other health care providers and even Medicare beneficiaries can commit Medicare fraud.
What Are the Types of Medicare Fraud?
There are two major types of Medicare fraud: Billing fraud and marketing fraud.
Billing fraud happens when a doctor, health care provider or you bills Medicare for something you didn’t receive, or for more than it cost. Marketing fraud happens when an insurance agent misleads you about certain coverage.
More than a million health care providers, contractors and suppliers receive payments from Medicare. And nearly 7.5 percent of Medicare spending went to people or companies committing fraud in 2017, according to an investigation by the Government Accountability Office.
The GAO reported Medicare fraud totaled about $52 billion in 2017 and only about $1.4 billion of that was recovered.
If you think you’ve witnessed or been a victim of Medicare fraud, you should report it immediately.
Suspicious payments or unusual amounts on your Medicare Summary Notice can alert you to possible Medicare fraud.
- Your name and Medicare number
- The doctor, hospital or other provider’s name and any other identifying information
- The medical service or product you think may be part of the fraud
- When you received the medical product or service
- The amount of the payment Medicare approved and paid
- The date on your Medicare Summary Notice or claim
Medicare Billing Fraud
Medicare billing fraud happens when someone bills Medicare too much or charges for services or products that you don’t need.
If you have Original Medicare, you should check your Medicare Summary Notice that arrives in the mail every three months for signs of Medicare fraud. The MSN will list all services and medical products that Medicare paid for during that three month period.
If you have Medicare Advantage, check your Explanation of Benefits (EOB) mailed to you from your plan.
And if you see unusual charges such as items you did not receive or durable medical products you’ve returned, you should report possible fraud to Medicare.
- You're charged for preventive services.
- A doctor or other health care provider offers you tests you don’t need.
- Your doctor or provider claims tests are cheaper if you receive several of them.
- A doctor or other provider seldom or never charges you for your coinsurance out-of-pocket payments.
Medicare Marketing Fraud
Medicare marketing fraud happens when someone from a private insurance company tries to deceive you about differences between Original Medicare and Medicare Advantage, prescription drug coverage or Medigap plans offered by private insurers.
An agent may try to convince you that if you buy a certain plan, you’ll receive extra benefits that are actually already part of your Medicare coverage. Or they may claim the only way you can get prescription drug coverage is to buy a Medicare Advantage plan.
Make sure you know exactly what a plan includes and ask for all information in writing. If you have proof that an agent has lied to you, keep the marketing materials and the agent’s card so you can report it.
If you buy a plan and it turns out later that you didn’t have the coverage you were promised you should also report it right away. You may be eligible for a Special Enrollment Period from Medicare to switch to another plan.
Tips for Preventing Medicare Fraud
The GAO’s 2017 report recommended better training in how to spot fraud as one of the ways to reduce Medicare fraud. There are steps you can take to prevent, avoid and report Medicare fraud.
- Protect Your Medicare and Social Security Numbers
- Give your numbers only to doctors or other health care providers. Do not give it out over the phone unless you are sure of to whom you are talking.
- Document Medical Care
- Keep a calendar of all medical appointments you have and any tests you receive to compare to your Medicare Summary Notice.
- Learn About Medicare Scams
- The U.S. Centers for Medicare & Medicaid Services highlights cases of Medicare scams, fraud and abuse. Reading up on these can help you spot a scam or fraud.
- Know the Rules
- Medicare has a list of rules for Medicare plans and what people representing those plans are not allowed to do when trying to sell you one. Knowing them before you shop for a plan can help you spot Medicare fraud.
- Be Wary of Free Stuff
- If someone offers to pay you if you have a medical service or if they offer it to you for free, it may be Medicare fraud. They may bill Medicare for it later.
- Be Cautious of Unnecessary Care
- Don’t request services from your doctor for medical care you don’t need, and question why a service the doctor recommends is necessary.
- Keep Medical Records Private
- Don’t let anyone besides your doctors or another health care provider review your medical records or recommend medical services.
What Is Medicare Abuse?
Medicare abuse includes billing Medicare for any unnecessary medical service or product that does not meet professionally recognized standards of care. Abuse can be anything that directly or indirectly contributes to unnecessary costs to Medicare.
- Billing for unneeded medical services or products.
- Charging too much for products or services.
- Using the wrong code so that the provider receives more money from Medicare than the approved amount.
Unlike Medicare fraud, which is a crime, Medicare abuse may not always be illegal, but health care providers may have to pay a civil fine or penalty if they commit abuse.
“The difference between ‘fraud’ and ‘abuse’ depends on specific facts, circumstances, intent and knowledge,” according to the U.S. Centers for Medicare & Medicaid Services.
Medicare abuse can include accidents, inefficiencies and illegal actions that cost Medicare more than it should be paying.
- These include accidents and errors such as incorrect coding that causes Medicare to pay more than the approved amount for a service or product.
- These are things that result in waste and can include ordering excessive or unnecessary tests and services.
- Bending the Rules
- These can include improper billing practices by doctors, hospitals or other health care providers or suppliers.
- Intentional Deception
- These forms of abuse result in Medicare fraud. They include billing for services or supplies that you never received.
5 Cited Research Articles
- U.S. Centers for Medicare & Medicaid Services. (2019, February). Medicare Fraud and Abuse: Prevent, Detect, Report. Retrieved from https://www.cms.gov/Outreach-and-Education/Medicare-Learning-Network-MLN/MLNProducts/Downloads/Fraud-Abuse-MLN4649244.pdf
- U.S. Government Accountability Office. (2018, July 17). Medicare: Actions Needed to Better Manage Fraud Risks. Retrieved from https://www.gao.gov/products/GAO-18-660T
- Bagdoyan, S.J. (2018, July 17). Medicare: Actions Needed to Better Manage Fraud Risks; Statement of Seto J. Bagdoyan, Director Forensic Audits and Investigative Service. Retrieved from https://www.gao.gov/assets/700/693156.pdf
- U.S. Centers for Medicare & Medicaid Services. (n.d.). How to Report Medicare Fraud. Retrieved from https://www.medicare.gov/forms-help-resources/help-fight-medicare-fraud/how-report-medicare-fraud
- U.S. Centers for Medicare & Medicaid Services. (n.d.). Tips to Prevent Fraud. Retrieved from https://www.medicare.gov/forms-help-resources/help-fight-medicare-fraud/tips-prevent-fraud