Medicaid Fraud
- Common Health Care Fraud Schemes
In addition to hospitals, doctors and pharmacists, healthcare providers include the following:
- Medical transportation companies such as taxi/van service providers;
- Home Health providers;
- Durable Medical Equipment suppliers – i.e. wheelchairs, prosthetics, adult diapers;
- Nursing Homes;
- Medical Laboratories;
- Home Infusion Treatment Companies;
- Managed Care Organizations – PPOs, HMOs;
- Rehabilitation Providers.
Common Health Care Fraud Schemes
- Billing for Goods or Services not Provided
- Paying "Kickbacks" in Exchange for Referring Business
- Billing for Medically Unnecessary Tests
- Charging Personal Expenses to Medicaid
- Inflating the Bills for Services Provided
- Managed Care Organizations (MCOs)
- Double Billing
- Consumer Deception Fraud
Billing for Goods/Services not Provided
A common type of Medicaid or healthcare fraud scheme is billing
for a treatment or procedure never rendered -- such as X-rays, laboratory
tests, drugs never dispensed. Patients should regularly review their Explanation
of Benefits forms received from the provider after they receive treatment.
Unexplained charges or procedures should be addressed to the provider,
or reported to the insurance company.
Fraudulent providers also "upcode" various medical procedures.
When a patient sees a doctor her or she is often unaware of the extent of
services which were provided. If payment is made by units of time, the time
can be expanded. A minor service can also be upcoded as a more labor intensive
or expensive service.
Paying "Kickbacks" in
Exchange for Referring Business
"Kickbacks" are common in healthcare fraud cases. State and federal
law generally prohibit payments to individuals who refer patients
to a particular hospital or doctor. Medicaid fraud prosecutions have been
brought, for example, against corrupt doctors for splitting fees in return
for rent, demanding cash payments from Medicaid patients, and taking money
in exchange for patient referrals.
Billing
for Medically Unnecessary Tests
An age old scam by some providers is misrepresenting the diagnosis
and symptoms on patient records and then submitting invoices to insurance
companies to receive a higher rate of reimbursement. An example of this would
be a patient who visited the doctor for a common cold treatment, but the
insurance company was billed for a condition diagnosed as pneumonia, with
associated pneumonia testing. Consistent problems with documentation can
be a fraud indicator.
Charging
Personal Expenses to Medicaid
This is a scheme most often engaged in by corrupt nursing homes.
Nursing homes are reimbursed based upon the annual submission of a cost report.
The inclusion of personal expenses in these costs reports is fraudulent.
An example of this occurs when a nursing home administrator includes the
cost of his personal car or home on the cost report. This is a criminal violation.
Inflating the Bills for Services
Provided
This regularly occurs in the Medicaid transportation sector when
van/taxi companies greatly inflate their claimed mileage in order to receive
greater reimbursement.
Managed
Care Organizations (MCOs)
Managed care presents different fraud issues. Whereas in standard
healthcare reimbursement situations, the fraud is characterized by overbilling,
a managed care environment creates an incentive to deny care to patients/consumers.
This means that while a fee has been paid by the MCO to the doctor for covered
services, the services are denied or cut back for other than sound medical
reasons. This not only defrauds the insurance company, but also compromises
patient health.
Fraud in MCOs also arises in enrollment practices whereby healthy
patients are "recruited" to join certain MCOs in a practice known
as "cherry picking." Often, they are paid in some fashion for their
enrollment.
Double Billing
Double billing occurs when the provider obtains payment from
two sources. For example, a provider involved in a drug study
bills the insurance company while at the same time receiving payment from
the pharmaceutical company. Similarly, two insurers or public programs, or
both, may be billed for the same service.
Consumer
Deception Fraud
Some fraud are committed by patients/consumers. Examples include
using someone else’s insurance card for benefits, listing a non-relative
as a family member to obtain coverage, claiming coverage for
treatments or supplies not received, faking worker’s compensation injury
to receive disability payments, and staged accident.