How to Stop Medicare Fraud From Happening to You

Protect your Medicare number, hang up on fraudsters, report bad guys

Katherine Skiba

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En español

Published July 01, 2019

Medicare fraud cost taxpayers millions of dollars each year

AARP

Shimon Richmond has two important pieces of advice for Medicare beneficiaries: Safeguard your Medicare number, and hang up on telemarketers who hawk medical remedies, supplies, tests and devices.

A federal lawman who supervises large-scale Medicare fraud investigations, Richmond urges people to be vigilant to help root out crime and corruption in the health insurance program for people age 65 and older.

Medicare spending hit nearly $706 billion in 2017, and experts say at least 10 cents of every dollar spent is lost to fraud and improper payments. Richmond is an assistant inspector general for investigations in the Office of Inspector General (OIG) at the Department of Health and Human Services (HHS). He helps direct the Medicare strike forces that deploy his agents, and the FBI and federal prosecutors, to go after the bad actors.

He spoke to AARP from Washington, and his edited remarks follow.

You were special agent in charge of the Miami office. What makes that city such a hotbed for Medicare fraud?

VIDEO: Shimon Richmond says that Medicare fraud steals tax dollars. He urges beneficiaries to safeguard their card numbers.

Fraud is a crime of deception and a crime of opportunity. And you have the opportunity with a large Medicare population as well as a large Medicaid population in the state of Florida.

One of the things you have to have to commit fraud in Medicare or Medicaid is patients and/or their [personally identifiable] information. So we tend to see across the country, areas with higher beneficiary populations have higher amounts of fraud.

What motivates these bad actors?

For many, it’s simply greed. The “easy money,” because there’s so much money involved. Those who engage in health care fraud are limited only by their creativity and their imagination. Across the country, wherever our investigators look, we have identified fraud issues in every corner of the industry.

How should consumers protect Medicare card numbers?

Safeguard it exactly as you would any other personally identifiable information. You don’t want your Social Security number floating around in public. You don’t want [to lose] any information that could be used to commit any kind of identity-theft-related crime.

The number is the Medicare beneficiary’s identity. With that, a fraudster can take advantage of their benefits to submit all kinds of fraudulent claims that can have a variety of negative effects on the patient.

Such as?

Such as inaccurate information [entered] in their medical record if a provider is putting, say, a false diagnosis to justify false services that were never provided or weren’t medically necessary.

And that can lead to real-life concerns that might affect their other physicians’ assessment of their [medical] needs, based on inaccurate information in their records.

It can result in beneficiaries getting billed for services or for costs associated with services that they shouldn’t be billed for. And it can result in inaccurate benefit-utilization determinations.

Say a power wheelchair is billed for them, but they don’t know anything about it. And then a few months later, they actually need a power wheelchair for the first time. Medicare is going to say, ‘No, you just got a wheelchair a few months ago.’ That claim is denied.

Then they have to go through all the efforts to try to correct the record and identify what was fraudulent, and get Centers for Medicare and Medicaid Services to reinstate their actual benefits.

How big a factor are telemarketers in Medicare fraud?

This is an increasing trend. Telemarketers are making unsolicited calls to Medicare beneficiaries to sell them or to talk them into some service, or to talk them into trying a “new product” that could help relieve their symptoms or their pain. It could be a better back brace than the back brace that they have. And [they’ll say], “Don’t worry, it’s at no cost to you, because Medicare will pay for it.”

And they will aggressively market to Medicare patients oftentimes things they don’t need. Orthotics is a common one. Sometimes it’s the pain creams. And all kinds of braces: back braces, knee braces, arm braces, neck braces.

Sometimes the fraud is the doctor didn’t even prescribe it. We also see fraudulent use of physician or prescriber identities.

Would you agree with the Federal Trade Commission’s advice: If you get a telemarketing call from a person or business you don’t know, hang up?

Absolutely. If you receive unsolicited phone calls from any kind of medical service provider, be extremely wary.

And don’t purchase anything?

Absolutely. I mean, you wouldn’t take some unsolicited call [from someone] selling you a car sight unseen. We should all utilize due diligence and safeguards.

Any other advice to Medicare beneficiaries?

Know who you are receiving your care from. If you are being solicited by a provider that you don’t know — or that you don’t have any relationship with — be very wary.

And one of the best things that a beneficiary can do — or their family members and caretakers — is look at that explanation of benefits that come in the mail before they get tossed in the trash.

If you see something on that statement that doesn’t look right — you didn’t have that surgery or service or never received that wheelchair or oxygen tank or whatever it may be — then report that suspected fraud to 1-800-HHS-TIPS, the OIG hotline to report suspected crimes.

Examples of Medicare Fraud

Fraudsters bill for unnecessary tests, drugs and equipment

Medicare fraud occurs in every corner of the health care industry, says Shimon Richmond, an official in the Department of Health and Human Services’ Office of Inspector General.

Recent frauds ran the gamut: unnecessary hospitalizations, tests and durable medical equipment; physical therapy that never occurred; ambulance transports that never happened; and home-health products, such as portable oxygen, that never reached the patient. The cases are in a government report on frauds for the year ending Sept. 30, 2018.

Richmond singled out some worrisome areas:

Home-health care agency fraud

Medicare covers home health care and supplies on a limited basis as ordered by doctors under plans they set up.

Sometimes no care is delivered, but Medicare is billed and pays for the phony care.

Beneficiaries might be part of the scheme, and paid $100 to $200 a month or given noncash kickbacks — such as housecleaning services or rides to a grocery — in exchange for signing monthly forms that falsely represent visits from home-health care attendants.

Pharmacy fraud

A crooked pharmacist and deceitful doctor in cahoots defraud Medicare with “ghost prescriptions.” The doctor writes a prescription for expensive medication and the pharmacist pays, for example, $50 for the document–but never dispenses anything to the patient.

In another scheme, a pharmacy bills for drug refills never given to the patient, or charges for an expensive, brand-name drug but the patient receives a cheaper generic medication.

Controlled-substance fraud

In one scenario, a Medicare beneficiary seeking the painkiller Oxycodone, for example, agrees with a doctor who proposes billing the insurance program for the highly addictive drug along with a host of other prescriptions. Only the Oxycodone is delivered; the other prescriptions go unfilled but Medicare is charged for all the drugs.

According to Richmond, some patients are aware of what’s happening; others are completely in the dark, not part of the scheme.

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