Help fight Medicare fraud

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Research, Statistics, Data & Systems

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23 Stunning Medicaid Fraud Statistics

1. In May of 2014, some 107 healthcare providers including doctors and nurses were arrested in several cities. These ones were charged with cheating the programs out of some $452 million in funds. 2. In 2010 federal officials arrested some 94 people who had filed false claims through Medicare and Medicaid, for a total of $251 million in fraudulent claims. 3. The Medicare Fraud Strike Force was formed by federal officials in 2007. The group visited some 1600 businesses in Miami at random, following up on billing to Medicare for durable medical equipment. Of those businesses, nearly one-third did not exist although they had billed Medicare for $237 million in the past year. 4. It was reported to one source that Russian and Nigerian mobs had moved to Florida from New York because it was easier to become involved with Medicaid fraud than it was to be involved with other organized crime activities. 5. A former official in New York City stated that some 40% of Medicaid payments in that city were “questionable.” 6. A story by the New York Times reported that a dentist in Brooklyn had filed 991 claims to Medicaid in one day alone. 7. The five states with the highest number of fraud cases include California, Texas, New York, Ohio and Kentucky. 8. In 2011, state governments recovered some $1.7 billion from fraudulent payouts. They spent an estimated $208 million to accomplish this. 9. In that same year, the federal government also recovered some $4.1 billion from fraudulent activity, but they too needed to spend hundreds of millions of dollars to do this. 10. In 2010 the Government Accountability Office or GAO reported that they had found some $48 billion in “improper payments” during the past year for Medicaid and Medicare. This amount was roughly 10% of the $500 billion that was paid out during the year. 11. That same year, U.S. Attorney General Eric Holder suggested that the amount of fraud was actually higher, somewhere between $60 and $90 billion in payouts. 12. The Department of Health and Human Services currently uses what is often called a “pay and chase” model for finding Medicare and Medicaid fraud. This is the practice of routinely paying out every claim as it comes in and then only pursuing those that seem blatantly fraudulent, such as a dentist filing 991 claims in one day. 13. The Department’s Secretary Kathleen Sebelius has stated that they are planning on pursuing pre-claim adjudication to analyze patterns in claims before they are paid out, and are looking to abandon the “pay and chase” model within the next few years. 14. Some estimate that private insurers lose 1% to 1.5% of their revenue to fraud alone and credit card fraud is estimated to be at around 0.05%, while Medicaid and Medicare numbers are closer to 10% to 15%. One reason for this discrepancy is that private insurers and businesses like credit card providers may be more willing to invest in software and other technology that allows them to spot fraud much more quickly than government programs, and to do so before those claims and charges are paid. 15. Spending for healthcare is estimated to reach some $3 trillion in the U.S. in 2014 alone, although this amount does not currently keep up with the rate of inflation. 16. Claims pursued by the federal government in 2012 included unlawful pricing by drug manufacturers, illegal marketing of products and medical devices that have not been approved of by the Food and Drug Administration, and violations of law in regards to kickbacks and self-referrals. 17. The year 2012 marked the third year in a row that the federal government recovered over $2 billion in these types of health care matters. 18. In 2012 the Civil Division Consumer Protection Branch, which files civil suits against those convicted of Medicaid and Medicare fraud, obtained almost $1.5 billion in judgments, fines, and other forfeitures against those convicted of such frauds. The department also obtained 14 convictions under what is called the Federal Food, Drug and Cosmetic Act. 19. As a means of preventing such fraud, punishments have become more severe. In a case reported on in The Economist, one owner of a mental health clinic received a penalty of 30 years in jail for false billing. 20. The number of fraud cases that have increased the most over the past few years include home health visits, as these are difficult to track and to prove or disprove in court. Durable medical equipment is also a large portion of the fraud cases, including electric wheelchairs and walkers. 21. Overbilling for HIV infusion is also a popular scam, despite there being a much more affordable and effective way of treating the disease. When one such fraudulent ring was shut down in Florida, it resurfaced in Detroit and Medicaid and Medicare were again scammed out of thousands of dollars, by the same perpetrator. 22. Medicare processors handle some 4.5 million claims every single day, which is also a reason for the high volume of fraud. 23. Many fraud cases also involve stealing the identities of patients. This allows doctors and other healthcare professionals and those who have nonexistent medical storefronts to bill these programs for equipment and medications.

Medicare Fraud Reporting Center

That final report included such absurdities as walkers for patients with purported sinus congestion, paraplegia or shoulder injuries. And hundreds of thousands of claims were lodged for diabetes-related glucose test strips for Medicare patients suffering purported breathing problems, bubonic plague or sexual impotence.

Medicare Fraud Strike Force

These teams have a proven record of success in analyzing data and investigative intelligence to quickly identify fraud and bring prosecutions. The interagency collaboration also enhances the effectiveness of the Strike Force model. For example, OIG refers credible allegations of fraud to the Centers for Medicare & Medicaid Services (CMS) so that it can suspend payments to the suspected perpetrators, thereby immediately preventing losses from claims submitted by Strike Force targets.

Health Care Fraud — FBI

The Bureau seeks to identify and pursue investigations against the most egregious offenders involved in health care fraud through investigative partnerships with other federal agencies, such as Health and Human Services-Office of Inspector General (HHS-OIG), Food and Drug Administration (FDA), Drug Enforcement Administration (DEA), Defense Criminal Investigative Service (DCIS), Office of Personnel Management-Office of Inspector General (OPM-OIG), and Internal Revenue Service-Criminal Investigation (IRS-CI), along with various state Medicaid Fraud Control Units and other state and local agencies. On the private side, the FBI is actively involved in the Healthcare Fraud Prevention Partnership, an effort to exchange facts and information between the public and private sectors in order to reduce the prevalence of health care fraud. The Bureau also maintains significant liaison with private insurance national groups, such as the National Health Care Anti-Fraud Association, the National Insurance Crime Bureau, and private insurance investigative units.

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