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Medicare Fraud, Errors, and Abuse Can Cost in Dollars and Health

By Nicole Liebau, Senior Medicare Patrol (SMP) National Resource Center Director

October 20, 2021
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Medicare fraud can be a big business for criminals. Medicare loses approximately $60 billion annually due to fraud, errors, and abuse, though the exact figure is impossible to measure.

Medicare is complicated. What may seem like an error to the beneficiary may simply be the result of a misunderstanding about benefits. It may also be abuse, which involves billing for services that are not covered or are not correctly coded.

Medicare fraud assumes criminal intent. The Centers for Medicare and Medicaid Services (CMS) defines fraud as “the intentional deception or misrepresentation that the individual knows to be false or does not believe to be true” and that is made “knowing that the deception could result in some unauthorized benefit to himself or herself or some other person.”

But make no mistake about it: The consequences of fraud, errors, or abuse could mean the loss of someone’s accurate medical records, potentially resulting in incorrect medical care or the loss of their life savings.

Senior Medicare Patrols (SMPs), which are in every US state and territory, play a unique role in the fight against Medicare fraud, errors, and abuse. SMP volunteers and staff serve as “eyes and ears” in their communities, educating beneficiaries to be the first line of defense. They also help beneficiaries sort out their unique circumstances of possible fraud, errors, or abuse.

Some common examples of suspected Medicare fraud or abuse are:

  • Billing for services or supplies that were not provided
  • Providing unsolicited supplies to beneficiaries
  • Misrepresenting a diagnosis, a beneficiary’s identity, the service provided, or other facts to justify payment
  • Prescribing or providing excessive or unnecessary tests and services
  • Violating the participating provider agreement with Medicare by refusing to bill Medicare for covered services or items and billing the beneficiary instead
  • Offering or receiving a kickback (bribe) in exchange for a beneficiary’s Medicare number
  • Requesting Medicare numbers at an educational presentation or in an unsolicited phone call
  • Routinely waiving co-insurance or deductibles

Common areas of Medicare fraud and/or abuse include ambulanceCOVID-19durable medical equipmentgenetic testing (including cardio genetic testing), home health carehospicemedical identity theftenrollment (including marketing violations), nursing home care (skilled care), outpatient mental health carepharmacy or prescription drug, and telehealth.

How You Can Protect Yourself and Others

You can be the first line of defense in protecting you or your loved one’s finances and Medicare benefits.

  • Treat your Medicare card like a credit card. Your Medicare number can be valuable to thieves who want to steal your medical identity or bill Medicare without even seeing you.
  • Don’t take advice or offers of medical services from people you don’t know who contact you by phone, text, or email, come to your house, or approach you in public.
  • Read your Medicare Summary Notice or Explanation of Benefits. Look for services or equipment you didn’t receive, double charges, or things your doctor didn’t order.
  • Ask questions and report problems. Call the doctor or company and ask them about mistakes. Call the insurance company if you still have questions.

If you think you may have been a victim of a consumer scam (such as Social Security, credit card, dating, identity theft, or lottery), contact the Federal Trade Commission at ReportFraud.ftc.gov. If you may have been a victim of abuse, neglect, or financial exploitation, contact your state’s protective services agency, call the Eldercare Locator at 1-800-677-1116, or, if you are in immediate danger, call 911.      

If you need assistance to report potential Medicare/Medicaid fraud, errors, or abuse, contact your local SMP by clicking “Find Help in Your State” on our website or calling 1-877-808-2468.

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