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5 Types of Medicare Fraud and How to Identify Them

March 17, 2023

As healthcare costs continue to grow, Medicare and Medicaid are two government programs that have become essential in providing care for millions of Americans. However, with the vast amounts of money involved, Medicare and Medicaid fraud has become increasingly prevalent. Medicare fraud occurs when an individual provider, hospital, or other practice intentionally bills Medicare for services that were not provided, overcharges for services, or otherwise submits false claims for payment. Medicaid fraud is similar but refers specifically to fraudulent activities related to the Medicaid program. The following are some of the most common types of Medicare and Medicaid fraud, as well as tips on how to identify them.  Since Medicare Fraud and Medicaid Fraud are both frauds against the government, it is critical for individuals to be able to identify the types of fraud to put an end to it, by potentially filing a whistleblower claim under the False Claims Act

Types of medicare fraud - How to identify medicare fraud.Types of Medicare Fraud

Billing for services not provided

One of the most common types of Medicare fraud is billing for services that were not provided. This can occur when a healthcare provider submits claims for services that were never performed or for equipment that was never provided or delivered to the patient. This type of fraud can be difficult to detect, as the patient may not check what services were billed to his or her insurance, and the provider may falsely document the service. One red flag for this type of fraud is if you receive a bill for a service or piece of equipment that you simply do not recall receiving. 

Upcoding

Upcoding is another common form of Medicare fraud. This occurs when a healthcare provider bills for a more expensive service than was actually provided. For example, if a patient receives a routine office visit that lasts only a few minutes, but the provider bills for a more complex visit that requires more time, resources and a more demanding evaluation, this would be considered upcoding. 

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Unbundling

Unbundling occurs when a provider bills separately for services that should be billed together. Under Medicare and Medicaid regulations, certain services must be billed using a single procedure code. For example, if a provider bills for an office visit and a brief phone call on the same day as two separate charges instead of billing for them as a single charge, if the regulations call for these items to be billed as one bundle, but the provider separates them by date of service or procedure code, this would be considered unbundling. 

Kickbacks

Kickbacks occur when a provider receives payment or other benefits in exchange for referring patients to a specific facility or provider. For example, if a provider receives a kickback from a laboratory in exchange for referring patients for testing, this would be considered Medicare fraud. This type of fraud can be difficult to identify, but one red flag is if a provider consistently refers patients to the same facility that pays the provider or is owned by the provider.

Medically Unnecessary Services

When a provider submits a claim for services that were not medically necessary, it is also an example of Medicare or Medicaid Fraud. For example, if a provider bills for a diagnostic test, surgical procedure, or other service that the patient did not need or without a valid physician order, this would be considered a false claim. 

6 Ways Healthcare Professionals Can Identify Medicare Fraud

As a healthcare professional, you have a critical role in identifying Medicare fraud. Fraudulent activities can not only harm patients but can also result in hefty fines and penalties for your institution and sometimes even be criminal in nature. Identifying fraud is essential in preventing these consequences and ensuring that patients receive the care they need. The following are some tips on how to identify Medicare fraud if you work in healthcare.

Review Billing and Documentation Practices

As a healthcare professional, you can review the billing and documentation practices of your institution to identify potential fraud. This involves reviewing medical records, bills, and other documentation for accuracy and consistency. Ensure that the services billed match the services provided, and that the medical records reflect the services that were provided. 

Monitor Referral Practices for Kickbacks or Self-Referrals

Monitoring referral practices is another way to identify potential fraud. Healthcare professionals should be referring patients to other providers based on medical necessity and patient choice, not financial incentives. Watch out for any patterns or trends in referrals to certain providers or facilities, particularly if they are not necessary for the patient’s care.

Look for Unusual Billing Patterns

Unusual billing patterns can also indicate Medicare fraud. Watch for trends in the frequency of certain procedures or services, particularly if they seem to be outside of the normal range for your institution or specialty. You can also compare your institution’s billing patterns with national averages to identify outliers.

Watch for Inappropriate Coding Practices

Suspicious or inappropriate coding practices, such as upcoding or unbundling, can also indicate Medicare fraud. Upcoding occurs when a provider bills for a more expensive service than was actually provided. Unbundling occurs when a provider bills separately for services that should be billed together. Watch for any instances where billing codes seem to be intentionally inflated or incorrectly applied.

Pay Attention to Complaints

Whistleblower complaints can be an important source of information when it comes to identifying Medicare fraud. If you hear of any complaints or suspicions from patients, employees, or other sources, take them seriously and potentially avail yourself of a free, confidential consultation with a whistleblower law firm.  

Stay Informed

Staying informed about current Medicare fraud schemes can also help you identify potential fraud. Keep up to date with the latest fraud schemes and common practices by attending continuing medical education sessions, reading industry publications, and networking with other healthcare professionals. Staying informed can help you identify potential fraud more quickly and effectively.

If you suspect that Medicare fraud has occurred, it is essential to report it immediately to whistleblower law firms like Brown, LLC. The False Claims Act provides protections for whistleblowers who report Medicare fraud, and you may be entitled to a percentage of any recovered funds. Contacting a Medicare fraud lawyer like Brown, LLC can help you navigate the reporting process and ensure that you are protected from retaliation.

Identifying Medicare fraud is essential in preventing harm to patients and the taxpayers. Healthcare professionals can identify fraud by reviewing billing and documentation practices, monitoring referral patterns, watching for unusual billing patterns, paying attention to coding practices, listening to whistleblower complaints, and staying informed about the latest fraud schemes. If you suspect that Medicare fraud has occurred, consider contacting  the qui tam law firm of Brown, LLC for free confidential consultation.