What is fraud and abuse?

What is fraud?

Fraud is the intentional deception or misrepresentation that an individual knows to be false or does not believe to be true and makes, knowing that the deception could result in some unauthorized benefit to himself/herself or some other person. The most frequent kind of fraud arises from a false statement or misrepresentation made, or caused to be made, that is material to entitlement or payment under the Medicare program. The violator may be a health care provider, an employee of a medical provider, a beneficiary, or some other person or business entity. 

Examples of fraud are:

• Billing for services and supplies that were not provided.
• Misrepresenting the diagnosis for a patient to justify the services or equipment furnished. 
• Altering claim forms to obtain a higher payment amount. 
• Unbundling (exploding) charges or up coding.
• Participating in schemes that involve collusion between a provider and a beneficiary, or between a supplier and a provider and result in higher costs or charges to the Medicare program (kickbacks). 

What is abuse?

The term ’abuse’ describes incidents or practices of providers that are inconsistent with accepted sound medical practice. Abuse may directly or indirectly result in unnecessary costs to the Medicare program, improper reimbursement, or program reimbursement for services that fail to meet professionally recognized standards of care or which are medically unnecessary. The type of abuse to which Medicare is most vulnerable is overutilization of medical and health care services. Such overutilization occurs when a patient receives services that are not medically necessary or reasonable. Abuse takes such forms as, but is not limited to:

• Claims for services not medically necessary, or, if medically necessary, not to the extent rendered. (e.g., a battery of diagnostic tests is given where, based on diagnosis, only a few are needed)
• Excessive charges for services or supplies. 
• Improper billing practices, including submittal of bills to Medicare instead of third-party payers which are primary insurers for Medicare beneficiaries. 
• Unusually large payments in relation to services rendered by lawyers, consultants, agents, and others.
• Increasing charges to Medicare beneficiaries but not to other patients. 

Although these types of practices may initially be categorized as abusive in nature, under certain circumstances, they may develop into fraud.

Recognizing fraud and abuse

Signs of potential fraud/abuse include, but are not limited to, the following:

• A complaint from a beneficiary that services shown on a Medicare Summary Notice (MSN) were never provided.
• Multiple claims for same services, same diagnosis, by same provider.
• Any information that a beneficiary had to pay more than the co-insurance and applicable deductible. 
• Information that both the beneficiary and Medicare program were billed in full for assigned services. 
• A claim for services provided after the beneficiary's date of death. 
• Any false representations, i.e., charges for services, identity of patients receiving services, dates that services were received, etc. 
• Indication that a physician frequently provides services unrelated to medical necessity, e.g., a physician bills an EKG for each of his/her nursing home patients. 
• A claim for non-covered services billed as covered services, e.g., an MSN shows complicated foot surgery, but the beneficiary said that care was routine cutting of nails, corns, and calluses. 
• Claims involving collusion between the provider and beneficiary resulting in higher charges billed to Medicare. 
• An allegation of soliciting, offering, or receiving a kickback, bribe, or rebate. 
• A complaint of excessive charges for services or supplies.
• Altering claim forms to obtain a higher payment amount.
• Claims for services not medically necessary, or, if necessary to the extent rendered, e.g., a panel of tests are performed when the physician only needed a single test. 
• The practice of billing for "gang visits" or services. An example would be a physician visiting a nursing home, walking through it in a few minutes, and charging for visits to 20 patients without rendering any specific services. 
• The practice of one physician referring a patient to another physician for a consultation which is not medically necessary. 
• Waiver of co-insurance/deductible. 
• Unbundled or exploded charges, e.g., billing of a multichannel set of lab tests to appear as if the individual tests had been performed. 
• Alteration of claims history records to generate fraudulent payments. 
• False provider disclosures of ownership in a clinical laboratory. 
• Split billing schemes, e.g., billing procedures over a period of days when all treatment occurred during one visit. 
• Use of the adjustment process to generate fraudulent payments. 
• Collusion between a provider and a carrier employee where the claim is assigned, e.g., if the provider deliberately overbilled for services on assigned claims, adjustments could be generated with little awareness on the part of the beneficiary.

UPIC points of contact

Providers may call the Provider Contact Center to report suspected fraud and abuse matters. All calls will be treated confidentially. In addition, you may remain anonymous if you do not wish to identify yourself.

If you prefer to submit your concerns regarding in writing to the respective UPIC, they may be sent to:

References

• MLN booklet: Medicare fraud & abuse: Prevent, detect, report
• MLN web-based training course: Medicare fraud & abuse: Prevent, detect, report