How to Commit Medicare Fraud

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A How to Manual to Commit Medicare Fraud
“Biggest Medicare Fraud in History Busted.” “Dallas Doctor Arrested for Alleged Role in Nearly $375 Million Health Care Fraud Scheme.” These are headlines from www.abcnews.com and a press release from the US Department of Health and Social Services from February 28, 2012. The press release continues, “The FBI views health care fraud as a severe crime problem. It causes increased costs for consumers, tax payers and health insurance plans, and degrades the integrity of our health care system and legitimate patient care.  Today’s arrests send a clear message to those persons who are not only defrauding our federal Medicare and Medicaid and private health insurance programs, but victimizing the elderly and the disadvantaged.  The FBI will continue to dedicate a substantial amount of expert resources to investigate these crimes.”

Health care fraud, specifically Medicare and Medicare fraud, is becoming big business.  Medicare fraud is a general term that refers to an individual or corporation that seeks to collect Medicare health care reimbursement under false pretenses. There are many different types of Medicare fraud, all of which have the same goal: to collect money from the Medicare program illegitimately. Medicare fraud is generally easy to do because it was originally set up as an “honor system” of billing. The United States government wanted to help honest doctors who helped the needy with medical services. There are not a lot of safeguards or internal controls in place to detect false claims. Most claims are paid automatically because the goal of Medicare was to pay claims quickly. Organized crime and gangs are starting to specialize in this type of fraud as it is much easier than selling drugs and if they are eventually caught the punishments are treated more like white collar criminals than drug dealers. The headlines that started this paper were about a Dallas doctor and his cronies who were able to perpetrate a $375 million dollar scheme by certifying hundreds of fraudulent claims for Medicare reimbursement and pocketing millions in payments for services not needed, or never delivered. He was able to perpetrate a $375 million dollar scheme between 2006 through 2011, an astounding amount of money over such a short time period. He was a doctor and there are certain advantages to perpetrating a Medicare scheme with a Doctor’s help. However, one does not need to have or even know a doctor to perpetrate this fraud. You can purchase Doctor Id numbers, patient ID numbers or just plain lie, cheat, and steal your way to millions of dollars. There are three main types of Medicare fraud: 1. Phantom Billing- The medical provider will bill for services never rendered like a blood test or an x-ray. They will bill for unnecessary tests or procedures. They will bill for new unnecessary equipment and either gives a used version or none at all. They will double bill a Medicare and a private insurance company. They will also bill for phantom visits and bill for more hours than are in a day. 2. Patient Billing: This involves a patient being in on the scam. The patient provides his or her Medicare number in exchange for kickbacks. The providers than bills Medicare for whatever they want and instructs the patient to admit that they did indeed receive the medical treatment. 3. Upcoding and Unbundling scheme: This is just a way to inflate bills by using the Medicare billing code system to bill for expensive procedures. I will discuss the different ways to commit a Medicare Fraud using these and other techniques to get away with $1,000,000 dollars. The Congressional Budget Office estimates that Medicare Spending was around $528 billion dollars in 2010. Improper Medicare payments for 2010 are thought to be around $45 billion dollars, although that number is hard to verify. The FBI and specifically the Medicare Fraud Strike Force is using new techniques to try...
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