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Medicare Fraud & Abuse Laws

Medicare, the federal health care program for the elderly and disabled, is an expensive benefit. According to the Wall Street Journal, the Medicare budget for Fiscal 2011 proposed in February 2010 was approximately $489 billion. With such big figures involved, waste cannot be ignored, and a portion of that budget will be wasted because of Medicare fraud. The Medicare Rights Center, a nonprofit Medicare advocacy and education organization, cites that Medicare fraud costs the federal government an estimated $16 billion a year, raising costs across the board.

  1. Billing Fraud

    • According to the Medicare Rights Center, it is in violation of Medicare law and is considered Medicare fraud for any provider to commit billing fraud. This includes billing Medicare for services that the Medicare beneficiary did not receive or for services different from what the beneficiary received. It is also illegal for durable medical equipment suppliers to continue to bill Medicare for any durable medical equipment after the beneficiary has already brought it back to the supplier.

    Service Fraud

    • It is considered Medicare fraud when a provider knowingly performs extraneous, medically unnecessary services for a patient, such as extra laboratory tests and X-rays, just to bill Medicare and make a profit.

    Misinformation

    • If a provider knowingly provides misinformation to a patient about Medicare coverage, that is also considered Medicare fraud. For example, if a provider knows a procedure or service is not a Medicare-covered procedure, but tells the patient that it is covered, that is considered fraud, according to the Medicare Rights Center.

    Marketing Fraud

    • Marketing is one of the biggest areas of Medicare fraud. Marketing fraud covers violations committed by those who sell private Medicare plans, either Medicare Advantage plans, Part D plans or Medigap plans. It is considered fraud when these plans use misleading tactics to get consumers to sign up. Such violations include false advertising, intimidating sales tactics and enrolling consumers in one type of plan when they thought they were enrolling in another (for example, enrolling someone in an expensive Medicare Advantage plan when she thought she was signing up for a Medigap plan).

      To reduce marketing fraud, several rules and regulations limit what sales agents for private companies can do to sell their product. In telephone marketing, sales agents cannot enroll the consumer if the agent places the call, and they cannot ask for personal information. Agents may not visit the consumer in the home unless invited. They cannot say their plan is Medicare-endorsed or say that they are employees of Medicare.

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