Medicare fraud costs an estimated $60 to $90 billion a year. Losing billions of dollars to fraud is a waste of taxpayer money, and fundamentally increases the cost of healthcare for everyone. It can also jeopardize beneficiaries’ personal and medical identity, and their ability to access entitled benefits and services. Knowing about fraud is key to protecting yourself and your loved ones.
Types of Medicare Fraud
Medicare fraud comes in all shapes and sizes reflecting Medicare’s huge and complex program with its Parts A, B, C and D (for readers who don’t sell Medicare yet: Part A is hospital insurance, Part B is outpatient medical insurance, Part C is Medicare Advantage plans and Part D is prescription drug
This is a lot of information, so let’s get started….
Overview on various types of fraud
Medicare fraud most commonly occurs in:
(1) Billing for institutional facilities such as nursing homes, residential facilities, hospitals, home health and hospice.
(2) Billing for physician visits and services not rendered or not medically necessary.
(3) Billing for durable medical equipment such as wheelchairs, body jackets, incontinence supplies or diabetic supplies without a doctor’s prescription.
(4) Improper marketing of health insurance plans through phone calls, door-to-door sales and misleading flyers.
(1) Providers can commit fraud if they submit bills for services not provided, or unnecessary services.
(2) They can also commit fraud if they upcode a service. This is when a provider charges Medicare for a more expensive service than was provided. For example, a provider may bill for surgery, when only a bandage was placed over a cut.
(3) Unbundling services can also be fraud. This occurs when a provider submits separate bills for lab services that combine three or four tests, which are intended to be billed as one service.
Billing for non-covered services as covered services is also fraud. This occurs when a provider bills a service such as routine toenail clipping (non-covered service) as foot surgery (covered service).
Suppliers and Recruiters Fraud
Suppliers can commit fraud if they:
Bill for different equipment than what the beneficiary received, bill for home medical equipment after it is returned or solicit, offer or receive a bribe or kickback.
Recruiters may stop Medicare beneficiaries on the street or make an at-home visit, offering money and promotional gifts as incentives to take “free” medical exams, after which they give the beneficiary medical
equipment they do not need.
Insurance Broker Fraud
Insurance brokers can commit fraud if they bribe, mislead, or coerce a beneficiary to enroll into or switch plans just to make a commission even though the plan may not be the best choice. Or if they enroll a beneficiary into an MA plan without the beneficiary’s consent or make unsolicited phone calls, emails or home visits.
Pharmacists can commit fraud if they dispense expired drugs or short the beneficiary on the number of pills in the prescription they deliver.
A beneficiary can commit fraud if they provide their Medicare number in exchange for money or a free gift. In some cases, beneficiaries may unknowingly commit fraud in this way. One of the best ways for your Medicare clients to detect fraud is to examine both their Medicare Summary Notice (MSN) they receive from Medicare after their claims are paid, and the Explanation of Benefits (EOB) they receive from their Part C and D plans. (Clients can access their Medicare account at mymedicare.gov).
These are some helpful questions to ask when clients review their MSN and EOB:
(1) Did they receive all the services/prescriptions listed?
(2) Were they billed for something they didn’t get? Or billed for the same thing twice?
(3) Did the doctor order the services?
(4) Do the prescriptions listed match their prescriptions?
(5) Are the dates of the services/prescriptions correct?
If after answering these questions, your clients suspect fraud, they can call our California Senior Medicare Patrol (SMP) at 1-855-613-7080.
Common Recent Scams
The most common fraud schemes our California SMP currently sees are hospice fraud, new Medicare card scams and “free” back brace scams. Medicare’s hospice benefit provides palliative care for people who are terminally ill and have 6 months or less to live. Yet scammers are signing up healthy people for this benefit while offering them “free housekeeping services covered by Medicare,” or “free milk for an entire year covered by Medicare!” They get beneficiaries’ Medicare numbers in exchange for the “free” benefit and sign them up.
In addition, some beneficiaries residing in low-income housing units are offered assistance with cooking and cleaning while unknowingly being placed in home health or on hospice. Help keep a look out and spread the word on these schemes to stop this fraud.
Beneficiaries should have received their new Medicare cards by now in California. If they haven’t, though, it is coming soon in the mail. Of course, there is no charge for the new card, so remind clients not to be tricked into sending money to scammers. Postcards, TV commercials, ads offering a “free” Medicare-approved back brace in exchange for your Medicare number.
Medicare only covers braces and other durable medical equipment (DME) that are medically necessary with a doctor’s prescription. Scammers, however, hope people don’t know that. They just want beneficiaries’ Medicare numbers to bill Medicare for equipment they never deliver, or to bill Medicare for much more expensive equipment. If clients think they need a back or knee brace, they should call their doctors first.
Open Enrollment Fraud Tips for Clients
In addition to all the scams we’ve covered thus far, more scams come during Medicare’s annual open enrollment (October 15 through December 7). This is the time beneficiaries can enroll into or change their Medicare Advantage and/or Part D plan, or return to Original Medicare. As MA and Part D plan coverage can change annually, it’s important for beneficiaries to review the changes in their coverage for the coming year. Navigating this information can be confusing and hence makes open enrollment a ripe time for scams.
Below are a few tips for clients to protect themselves from fraud during this time.
(1) Beware fake Medicare sales representatives: Make sure clients understand not to believe a salesperson who claims to be a Medicare representative. Of course, Medicare does not send “representatives” to solicit anyone’s business. Federal regulations prohibit unsolicited telephone calls, door-to-door visits, emails and other forms of sales without permission. Make sure clients understand that if they have not requested that someone contact them, it may be a scam.
(2) Guard personal info: Tell clients to never give out personal information such as a Social Security number, bank account numbers, or credit card information over the telephone.
(3) Keep good records: Advise clients to keep records of who they speak with – even you! — and the information that they provide.
(4) Take their time: Clients shouldn’t feel pressured to make a quick decision. Tell clients to be sure that they understand the details of a plan before they enroll. They should verify copayment amounts and whether their medical providers participate in the plan that they are considering.
(5) Change isn’t mandatory: If clients are satisfied that their current plans will meet their needs for the coming year, they don’t need to change plans. They should confirm the details of their current plan before making a switch.
Thanks to all of you for being the “eyes and ears” of Medicare and watching out for scams. Please share this information and report any suspected fraud to our California Senior Medicare Patrol at 1-855-613-7080.
More information on Medicare fraud, resources for education and outreach are in the fraud and abuse section of our website at calhealthadvocates.org.