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Types of Medicaid Fraud

Since 1964, Medicaid has helped people with low incomes and disabilities receive medical care. Medicaid also pays for medical care for children and the elderly. When Medicaid patients need help, the federal government pays for services such as hospital and nursing care. However, Medicaid also ends up paying false claims submitted by insurance cheats looking to abuse the system. Scams include billing for services that were not performed, or altering medical codes to make more money than they are entitled.

  1. Kickbacks

    • Kickbacks occur when two medical providers work together to defraud Medicaid by referring patients to one another in exchange for money or gifts. This type of fraud results in patients receiving tests that they don’t need.

    Billing

    • Providers who commit Medicaid fraud often bill for services that they never performed—such as x-rays and blood tests. Another common form of Medicaid fraud is to bill twice for the same procedure. When this happens, the provider bills the patient or private insurance company for a service and then bills Medicaid for the same service.

    Service Irregularities

    • Sometimes providers that commit Medicaid fraud do not accurately describe the services provided. For example, a service provider engages in what is known as upcoding, which means the provider sends a bill for more service than was actually performed (such as a visit that was longer than it actually was.)

      Similarly, unbundling is a type of Medicaid fraud that also involves how bills are reported for payment. In this kind of Medicaid fraud, a service provider takes one Medicaid service and bills for multiple services.

    Drug Billing and Service Exaggerations

    • In some cases, providers will bill Medicaid for a brand name prescription drug when the patient actually received a cheaper, generic equivalent.

      Another form of Medicaid fraud occurs when a provider bills for lab tests that a patient never needed in the first place. This is done by exaggerating a patient’s symptoms in medical records and then billing for tests associated with those symptoms.

      Some insurance cheats also bill Medicaid for expenses that are not permitted, such as items that there purchased for the provider’s personal use.

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