Medicare and Medicaid Fraud

Medicare Fraud

Medicare (and the related Medicaid) programs are by far the largest government sponsored healthcare plans.  These two programs provide health care coverage for more than 100 million Americans, with an estimated cost approaching a trillion dollars annually.  Medicare alone is estimated to cost the government more than $900 billion by the year 2020, according to government reports. 

One of the primary reasons for the rise in health care costs has been the large degree of fraud committed against government healthcare programs, Medicare in particular.  The Medicare program is a target for fraud because it is based on the “honor system” of billing, where the government would reimburse a doctor for services without first verifying the validity of those services. It was originally set up to assist honest doctors who helped the needy with medical services.  The substantial level of healthcare fraud is one of the main reasons why the U.S. Government Accountability Office has labeled both the Medicare and Medicaid programs “high-risk programs.”

Due to the sheer volume of health care claims submitted on behalf of the millions of Americans insured under these programs, the government alone cannot effectively combat healthcare fraud.

The total amount of Medicare fraud is difficult to track, because not all fraud is detected and not all suspicious claims turn out to be fraudulent. According to the Office of Management and Budget, Medicare “improper payments” in 2010 alone were $47.9 billion.  While the Affordable Care Act of 2010 provided an additional $350 million to pursue physicians who are involved in Medicare fraud, whistleblowers remain the government’s best and most efficient weapon in detecting and ferreting out healthcare fraud.

Common Forms of Medicare Fraud

Healthcare fraud can occur in an infinite number of ways.  But the most common can be grouped in the following categories:

The medical provider or hospital bills Medicare for procedures that are never performed, or medical tests that are not necessary, or for equipment that was never given to the patient.  Submitting such false claims to the government for payment under Medicare (or other federal programs) is a potential violation of the False Claims Act.

Bribes and kickbacks involving medical providers can take two forms: (1) between doctors (or hospitals); and (2) between doctor and patient.  In the first category, the typical example is where a hospital pays another medical provider (e.g., a cardiologist) for patient referrals, or vice versa.  Paying for patients, or patient referrals, is a violation of the False Claims Act.  In the second category, the most common situation is where a person will “loan” the doctor her patient Medicare number (or HIC) and allow the doctor to submit “bogus” claims using that number.  Doing so, as with the other type of situation, is also a violation of the False Claims Act.

When a doctor submits a claim to Medicare, the claim form usually has a Healthcare Common Procedure Coding System or HCPCS code that denotes the type of procedure that was performed.  Sometimes doctors will use an improper code that allows for a higher reimbursement rate.  This is “upcoding” and can lead to False Claims Act liability.  Similarly, sometimes a doctor will “unbundle” a HCPCS code that includes many different procedures and bill each of them separately to, again, allow for a higher total reimbursement rate.  This is sort of like paying for each individual item in a Happy Meal (burger, fries, soda), when buying the Happy Meal as one item would have been cheaper.  This, again, opens up the doctor to liability under the False Claims Act. 

Medicare Fraud Attorneys

Robbins Geller Rudman & Dowd LLP is committed to fighting for our whistleblower clients in their courageous efforts to combat fraud.  If you are aware of an instance where a government contractor is committing, or has committed, fraud on the government and are thinking of blowing the whistle, please contact Jonah H. Goldstein or James E. Barz.  We can help you understand how to file a claim, what compensation you may be entitled to for your effort, and what protections you are afforded as a whistleblower, and can answer any other questions you may have concerning the False Claims Act.