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Volume 14, No. 2, Spring 2006 |
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How to Identify and Prevent Medicare Fraud
Laura J. Waterland, Senior Staff Attorney
Disabilities Law Program
A recent AT Messenger article on Medicare’s new criteria for wheelchairs and scooters (Summer 2005) highlighted an ongoing problem—Medicare fraud. The Centers for Medicare and Medicaid Services (CMS) has cracked down hard in the last few years on durable medical equipment providers after numerous cases of fraud were discovered. Payments for power wheelchairs had risen 450 percent from 1999 to 2003, while the Medicare population had risen only one percent. Investigations revealed rampant fraud in the sale of durable medical equipment, especially power wheelchairs. In 50 investigations, federal authorities discovered $167 million in fraudulent power wheelchair claims alone.
Medicare fraud is a huge problem that ultimately costs us all, as wage earners, as taxpayers, and as consumers of medical services. Medicare spending in 2004 was $295 billion—roughly 12 percent of the total federal budget. And this was before the Medicare Prescription Plan! The federal government estimates that about 10 percent of expenditures are wasted on fraud and abuse. One way to help keep Medicare solvent is to reduce fraud.
With the arrival of Medicare’s Part D prescription drug program, there is more concern than ever that unscrupulous individuals will cook up ways to swindle Medicare recipients who are trying to navigate Part D’s complex waters. Below I will go over some tips to help Medicare recipients identify potentially fraudulent activities and to avoid being “scammed.”
Billing Fraud
Medicare fraud comes in numerous guises. The first is in billing. A typical scam is billing for services or procedures that have not been performed. Another is billing for an item that is different than the one you received. For example, a doctor prescribes and a supplier delivers a manual wheelchair, but the billing statement lists a power chair. Double-billing is another common scheme.
Here are some real examples from 2005:
- In South Carolina, a licensed physical therapist was sentenced to 18 months in prison and ordered to pay $400,000 in restitution for health care fraud. The therapist billed Medicare and a private insurer for three to five hours of therapy when only a one-hour treatment was rendered.
- In Virginia, a psychologist was ordered to pay $11,000 in fines and restitution for health care fraud. The psychologist submitted fraudulent claims to Medicare for neuropsychological evaluations and testing on nursing home patients. Many of the claims submitted were for dates of service when the psychologist was out of town. • In Texas, the owner of a durable medical equipment company was ordered to pay $546,000 in restitution for billing Medicare for power wheelchairs that were either not provided or were not medically necessary.
- In California, the owner of a laboratory company was sentenced to 10 months incarceration and ordered to pay $180,000 in restitution for health care fraud. The man billed Medicare for diagnostic tests, including echocardiograms and ultrasounds, which were not ordered by a physician and were never interpreted by a physician.
Marketing Fraud
Another primary fraud method is sales and marketing. The power wheelchair fraud cases provide good examples of this type of scam. Medicare recipients were targeted with misleading advertising, aggressive door-to-door salesmen, and salesmen who even trolled shopping malls. In many cases, the scam artists submitted claims for chairs that were never supplied. In other cases, chairs were supplied for people who did not need or use them. In one Florida case, after a visit from a salesman, an elderly couple received two power wheelchairs, a hospital bed, and a pressure mattress, and they didn’t need any of it.
A New Jersey company has gotten into a lot of hot water for its marketing tactics. Electric Mobility (famous for its Rascal scooters) has been the subject of state scrutiny. Electric Mobility engages in aggressive telemarketing and other hard-sell tactics. In an agreement with the State of New Jersey, Electric Mobility agreed, among other things, to refrain from misrepresenting that Medicare would pay for a scooter if, in fact, the claim would likely fail.
Aggressive telemarketing has been a particular worry with Medicare Part D. Part D regulations allow “cold” marketing calls to Medicare beneficiaries. And while most calls have been on the “up and up,” there have been scams. CMS sent an alert out in early March 2006 regarding a scam called “The $299 Ring.” A telemarketer attempts to solicit financial information over the phone for a fictitious prescription plan. The telemarketer in the scam tells the victim that there is a one time fee of $299 to sign up for the plan. Other pressure tactics are employed, such as telling the victim that time for enrollment is running out.
How to Spot and Prevent Fraud
For billing fraud:
- Review your Medicare Summary Notices each time and ask about any information you don’t understand. Ask yourself whether you received the product or service that was billed. Did your doctor order the service? Look out for duplicate charges for the same service, charges for services that were never performed or equipment that was never ordered, and inappropriate or unnecessary charges for higher cost or new equipment when provided lower cost or used equipment.
- Do not give your Medicare number or card to anyone except your doctor or other Medicare health professionals or legal representatives. Treat it like it is a credit card number.
- Don’t accept free equipment or services in exchange for giving your Medicare card. Nothing is ever free. Don’t accept money to perpetuate or facilitate a fraud. You could very well end up going to jail.
- Don’t allow anyone except appropriate medical professionals or your representative to review your medical records.
For abusive marketing practices, be suspicious of any provider or salesperson who:
- Indicates that the service is free, offers to waive your co-payments, or provides you with a free consultation.
- Indicates that Medicare wants you to have a service, claims to know how to get Medicare to pay for it, or wants you to go to their doctor.
- Indicates that they represent Medicare.
- Uses pressure or scare tactics, such as telling you that you will lose your benefits or ability to get a service, or that Medicare is ending soon.
- Uses telemarketing or door-to-door sales— this is not a reputable sales strategy for medical supplies or services. You can stop telemarketers from calling you at all by registering your phone number with the Federal “Do Not Call” Registry at (888) 382-1222.
For Medicare Part D, CMS has allowed restricted telemarketing by prescription programs. However, plans can only call during certain hours and you cannot be enrolled over the phone or asked to pay for a plan over the phone. You can call them back to enroll. They are required to respect your request that they not call again. Also, while you can enroll on the internet, you cannot be asked to pay over the internet. The plan must send you a bill. No one can come to your door uninvited or ask you for personal information during marketing activities.
If you suspect fraud, you can report it a number of ways. CMS suggests that you should first try to resolve the matter with your health care provider and the Medicare Carrier or Fiscal Intermediary. In Delaware, this is Trailblazer at (888) 205-6833 for Part B claims and Empire Medicare Services at (800) 633-4227 for Part A claims. If that doesn’t work, CMS operates a fraud hotline at (800) 447-8477 and TTY (877) 486-2048, or fraud can be reported via email at htips@dhhs.gov.
Delaware’s Division of Services for Aging and Adults with Disabilities operates a toll-free number to report Medicare Fraud, (800) 223-9074, or (302) 453-3838 to report in Spanish. You can report fraud to the Delaware Insurance Commissioner’s Office at (800) 282-8611. Many of these activities also violate state consumer protection laws. Delaware Attorney General’s Fraud and Consumer Protection Division can be contacted at (302) 577-8600.
If you report fraud to Medicare and your report leads to the recovery of at least $100, and the claim is not already being investigated, you could be eligible for a cash award of up to $1,000. You can do your part to protect yourself and to improve the fiscal integrity of the Medicare program by protecting your private information and being alert and aware of the potential for fraud. Remember—there is truth to the old saying that if it seems too good to be true, it probably is!
