|  | Healthcare Industry | Health Insurance

Medicare Fraud Penalties

Medicare is a government program that provides health care coverage to people who are over 65 or who are disabled. This program has come under siege by criminals who recognize the multiple methods of defrauding the system. As a result, legislative leaders are working to toughen the penalties for stealing from Medicare funds, as shown by Medicare's Most Wanted website.

  1. Financial Penalties

    • Under current U.S. law, those who are guilty of Medicare fraud may face fines. The exact amount of the fine depends on which statute has been violated. For example, the fine for making a statement about medical services you know is false is $10,000, while the fine for receiving a kick-back is $25,000. Fines may reach up to $500,000 depending on whether the violator is an individual or corporation.

      In addition to fines, those who commit fraud may have to pay back all overpaid monies. These repayments may be equal to or even more than the amount of fines, depending on the extent of the fraud.

    Criminal Prosecution

    • Those who commit Medicare fraud may face up to five years in prison. However, the five-year term is per offense. Those charged with many counts of Medicare fraud who are found guilty may receive the equivalent of a life sentence.

      Courts may assign jail time instead of giving fines. Jail time also may be assigned in addition to the fines.

    Administrative Sanctions

    • If a case can be made that Medicare fraud is the result of poor administration, an organization may receive administrative sanctions. The sanctions may include but are not limited to the suspension or revocation of licenses and the suspension of provider payments.

    Examples of Fraud

    • Examples of Medicare fraud are helpful in understanding when Medicare fraud penalties are applicable. Fraud includes acts such as billing for the same service twice or for services never actually rendered, charging for the use of new equipment but using old equipment, inflating claims with diagnostic codes that do not apply and listing hours not actually worked by employees.

    Importance

    • Medicare's Most Wanted website indicates that Medicare fraud costs Americans approximately $60 billion every year. The burden of this debt falls onto those who use the system and need it the most. Without fraud penalties, criminals would have little motivation to stop stealing from the program.

Health Insurance - Related Articles