Medicare abuse is generally when illegal practices cause unnecessary billing costs for the insurance program. There are several types of Medicare abuse.

This article describes Medicare abuse, the difference between abuse and fraud, and the cost to the United States. It also looks at how to recognize and report these practices.

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Billing for services that are not medically necessary is one form of Medicare abuse.

Medicare abuse is an act that results in unnecessary costs, indirectly or directly, to the Medicare program.

It can also refer to an action or practice that fails to offer people services that are medically necessary.

The most common types of Medicare abuse include:

  • billing for services that are not medically necessary
  • overcharging for services or supplies
  • improperly using billing codes to increase reimbursement

Medicare fraud is when a person deliberately seeks financial gain when they know the money does not belong to them. Fraud can also occur when a person tries to obtain money or other compensation for services or items for which they get Medicare reimbursement, or when they make banned referrals.

Individuals or groups can both commit Medicare fraud. The people involved, either indirectly or directly, can include doctors, other health providers, suppliers, and Medicare beneficiaries.

Medicare abuse and fraud can expose doctors and other health providers to civil and criminal liability.

What are examples of Medicare fraud?

There are many ways to commit Medical fraud. For example, if a doctor or other healthcare provider:

  • bills Medicare for services they have not provided
  • bills for services different from the care they give to patients
  • pays for referrals of Federal healthcare program beneficiaries

Other Medicare fraud possibilities include when a person does any of the following:

  • continuing to bill Medicare for rented durable medical equipment (DME) after their return
  • advising people that Medicare will pay for a service or supply when this is not true
  • using a stolen Medicare number or card to submit fraudulent claims
  • billing for a doctor appointment that a person did not attend

How common is Medicare fraud?

Fraud schemes range from single-person enterprises to a wide range of activities committed by large institutions. Organized crime groups can also falsely represent themselves as Medicare providers or suppliers.

According to the National Health Care Anti-Fraud Association, the U.S. spends more than $3.6 trillion on healthcare every year and estimates healthcare fraud costs billions of dollars annually.

In 2019, the Department of Justice reported that it began 1,060 new criminal healthcare fraud investigations and filed criminal charges in 485 cases involving 814 defendants. That year, more than 500 defendants were convicted of fraud-related healthcare crimes.

There are many ways to commit Medicare abuse or fraud. People can help look out for and avoid Medicare abuse by following some basic steps, including the following:

  • reviewing all Medicare Summary Notices for errors, and reporting anything that looks wrong or suspicious to Medicare
  • checking statements from Medicare Advantage plans, as they should show all a person’s services and prescriptions
  • comparing appointment dates and the type of health services received with the statements received from Medicare
  • checking all receipts and statements for possible mistakes

Sometimes, a person may want to call their doctor or other health provider’s office to discuss the possible mistake and check facts, before they report it to Medicare.

If a person believes they may have noticed Medicare abuse or fraud, they can report it in three ways:

  • calling Medicare at 1-800-633-4227, or 1-877-486-2048 for TTY users
  • contacting the Senior Medicare Patrol (SMP) resource center at 877-808-2468
  • contacting the Inspector General fraud hotline at 1-800-447-8477

For the call, a person will need to gather information. This includes:

  • name and Medicare number
  • doctor or healthcare provider’s name and any identifying information
  • service or item in question and when it was given or delivered
  • dollar amount approved and paid by Medicare
  • the date on the Medicare Summary Notice or claim

If a person is enrolled in a Medicare Advantage plan and suspects Medicare abuse or fraud, they can also call the Medicare Drug Integrity contractor at 1-877-772-3379.

Medicare abuse and fraud are unlawful practices that may result in unnecessary costs billed to the insurance program.

People can help prevent Medicare abuse by checking the information is correct on any Medicare or Medicare Advantage plan summary notices, statements, and receipts.

To report Medicare abuse or fraud, a person can contact 1-800-MEDICARE, or 1-800-633-4227.