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Healthcare Fraud: What You Need To Know

2011 November 3

Medical fraud is an umbrella term which encompasses several fraudulent activities carried out by companies or people in the medical industry. This term can refer to individuals who claim that they possess the professional credentials when in reality they don’t. One more kind of healthcare fraud involves durable medical equipment (DME) and this can be carried out in a number of ways. One of the most common schemes is phantom supplies wherein the insurance company receives a bill detailing more items than what the patient actually received. Charging the insurer for a newer more expensive model of PAP machine but giving the patient an older, cheaper model constitutes DME fraud.

Health care fraud also includes illegitimate health insurance claims. Like DME fraud, Medicare fraud can be done in a number of ways. Probably the most well-known tactic used by these fraudsters is to bill for treatments which were not actually performed. Service upcoding is one more strategy used in health insurance fraud and this is done by charging the insurance company for treatments that are higher in price compared to what was really performed. A routine follow up being billed as an initial visit would also constitute service upcoding. This scheme can also apply to medications, when branded ones were billed even though the patient was given with generic ones.

Unbundling also is another form of Medicare fraud. In this scenario, tests or procedures which would normally cost less when bundled together are instead billed in a fragmented fashion to maximize reimbursements. For example, even though the test performed was a hepatitis panel, the clinic staff bills each test within the panel as if they were done on separate days.

This medical fraud enterprise can have a number of players all working together. This includes the doctors who prescribe unnecessary treatments or operating under a kickback arrangement with the supplier. The clinical staff does most of the legwork in this illegitimate activity by preparing fraudulent billings to insurers. Medical equipment makers and vendors may also be involved in this illegal business venture, providing kickback arrangements to medical professionals. There are also instances when the Medicare beneficiary himself takes part in this activity by agreeing to the charge the insurer for phantom equipment or services.

You should report Medicare fraud simply for the reason that it erodes approximately 60 billion dollars of our nation’s health care fund annually. Even more disheartening is the fact that healthcare providers seem to put more importance to profit than patient safety.  Each state has its own hotline where you can report Medicare fraud.

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