Explain Like I’m 65: "Medicare Fraud"

Table of Contents:

1. What Is Medicare Fraud?
2. Medicare Fraud vs. Medicare Abuse
3. Recognizing Medicare Fraud
4. Reporting Medicare Fraud
5. Avoiding Medicare Fraud

Some people act like they know it all. Our new series Explain Like I’m 65 is for the rest of us. It will provide clear, digestible summaries to help seniors sort through the noise and get the factual information they need. From political buzzwords to household how-tos, we’re here to provide accessible guides and informative answers.

This week we’re looking at the various ways that scammers (and even some innocent bystanders) commit Medicare fraud and abuse.

What Is Medicare Fraud?

The term “Medicare fraud” refers to the spectrum of dubious activities that attempt to defraud the Centers for Medicare and Medicaid Services (CMS). While scammers set their sights high, their actions have repercussions that can affect individual beneficiaries as well.

Examples of Medicare fraud include:

• An insurance company or healthcare provider charging Medicare for an expensive procedure that was not performed or was not actually necessary.
• A recruiter offering a bribe to a prospective beneficiary to encourage them to join a specific plan.
• A healthcare telemarketer calling seniors to offer cutting-edge new medical equipment, sending nothing, and charging Medicare anyway.
• A pharmacist underfilling a Medicare-approved prescription to keep from depleting their inventory.
• A beneficiary using their Medicare ID card to obtain drugs, services, or equipment that they do not need.

As you can see, Medicare fraud occurs at every touchpoint throughout the program. Businesses and individuals alike contribute to the estimated billions in lost funds every year.

Medicare Fraud vs. Medicare Abuse

While they’re closely related (and both illegal), Medicare fraud and Medicare abuse are slightly different crimes. The distinction comes down to the intent behind the illegal action. Someone is only guilty of fraud when they have knowingly attempted to mislead someone or misrepresent information for their financial gain. Abuse is more incidental. Bad accounting practices, poor hiring decisions, and simple ignorance can lead both beneficiaries and organizations to unwittingly commit Medicare abuse.

Recognizing Medicare Fraud

The efficacy of Medicare scams will vary greatly from fraudster to fraudster. Some have developed sophisticated methods over the years, while others are rank amateurs hoping to get lucky. Scammers may target a beneficiary at any time — during selection, at the point of care, or elsewhere.

To spot billing fraud, take care to confirm that the statements you receive from Medicare are consistent with your own records. Original Medicare beneficiaries should use their Medicare Summary Notice to confirm that they haven’t incurred any unexpected charges. Beneficiaries of Medicare Advantage will need to instead rely on similar documentation from their private insurance provider. CMS advises beneficiaries to check their claims and statements early to ensure a quick response.

Fraudulent marketers and recruiters are more likely to give themselves away by making false promises or providing misinformation. Nobody from CMS will ever call you on the phone to discuss Medicare or solicit payment and there are a number of rules for how private insurance providers are allowed to behave. Familiarize yourself with these rules and remember that you should never feel pressured to select one plan over another.

Reporting Medicare Fraud

Nobody has an exact figure for the annual cost of Medicare fraud and abuse. A fairly conservative estimate from the National Health Care Anti-Fraud Association suggests that around $68 billion is lost to fraud and abuse each year. Others expect that number is closer to $250 billion and may represent as much as 10% of annual healthcare spending. Over time, this has ripple effects including higher premiums and deductibles for Medicare beneficiaries.

Beneficiaries and professionals within the healthcare industry have several options for reporting suspected Medicare fraud or abuse. Anyone who suspects a billing error, should first contact their healthcare provider to confirm the error. Both Original and Medicare Advantage beneficiaries have access to their consumer helplines for reporting suspected fraud:

Original Medicare: 1-800-MEDICARE
Original Medicare (deaf beneficiaries): 1-877-486-2048
Medicare Advantage: 1-877-7SAFERX

Avoiding Medicare Fraud

Scammers are everywhere, but staying safe can be as simple as exercising a little extra caution. Beneficiaries should keep these tips in mind as they navigate the healthcare space and attempt to make informed selections.

• Do: keep personal information like your Social Security number and Medicare number confidential and take immediate action if you believe they’ve been compromised in any way.
• Don’t: Share this type of information with anyone other than your healthcare provider, spouse, or appointed medical agents. A representative from CMS will never call you to ask for this information.
• Do: Consult Medicare’s coverage rules and other CMS literature whenever you’re concerned. The CMS makes it very clear what a provider can and cannot offer and how they can and cannot conduct themselves.
• Don’t: Answer the door for anyone claiming to represent CMS or claiming to offer CMS-approved products and services.
• Do: Keep a record of any doctor’s appointments or other relevant healthcare events.
• Don’t: Permit anyone other than your doctor or other approved providers to review your medical records or offer healthcare consultation.
• Do: Exercise healthy skepticism toward any and all correspondence with anyone claiming to represent CMS or a healthcare/insurance provider.

Remember that opportunistic scammers will take advantage of chaos and confusion whenever possible. Both the COVID-19 pandemic and the 2020 Census are providing daily opportunities to imitate government officials and exploit vulnerable populations. Uncertain times are all the more reason to make certain that you’re proactive and protected.