Medicaid Fraud

Medicaid is a gigantic government program. Because of its sheer size and the amount of money involved, Medicaid is a popular target for fraud. Fraud can take place under a variety of methods. Medicaid clients and providers can both defraud the program in a number of ways. Accurate fraud statistics are difficult to compile. However, more than $1.3 trillion were spent on health care in 2000. Out of those funds, analyst’s estimate between 3 to 10 percent were fraudulently spent or used.

Because both federal and state governments are involved with Medicaid, there are many laws defining Medicaid fraud. Some states’ penalties are stricter than others. Fraud may be investigated by federal or state authorities depending upon the laws broken, the amount of money involved, and where the fraud was reported.

For Medicaid clients, the most common methods of fraud are simply submitting false documents or failing to submit the proper documents. Accurate documents would disqualify fraudulent clients from receiving Medicaid benefits. Among the methods of document fraud from clients are:

  • Duplicate applications or grants
  • Felony convictions
  • Unreported assets
  • Unreported employment
  • Unreported income
  • Unreported marriage

Because health care providers interact directly with patients and serve as an intermediary between them and Medicaid, their fraud can be much more difficult to detect. Patients’ vigilance is necessary to help combat Medicaid provider fraud.

Bribery involves both clients and providers. Providers may bill for unneeded or unused services and then split the reimbursement money with the client. Some other common methods of provider fraud include:

  • Accepting or taking something in exchange for medical services (kickback)
  • Billing for brand name drugs but giving patients generic drugs
  • Billing for goods or services not performed (phantom billing)
  • Billing for goods or services not needed
  • Double-billing for services rendered
  • Embezzlement of funds

After a trial, those convicted of fraud will likely have to repay any money they stole. Depending upon the amount of money taken and other charges, they may have been convicted of a felony. A felon will lose the right to vote or serve in public office. They may also lose the right to certain licenses, such as a visa. A felony conviction can keep a person from gaining a job and is grounds for employment termination. For providers, those convicted of fraud will likely have their license to practice revoked.

Noticing medical fraud in Medicaid takes everyone. For Medicaid caseworkers and providers, they can double-check new patients’ paperwork. They can also report any attempts to bribe them or to ask them to take kickbacks. Even joking attempts should be reported to authorities. The authorities may be able to combine multiple reports to determine if a client is doctor-shopping or testing providers’ willingness to commit fraud.

For Medicaid clients and patients, they should be informed and knowledgeable about their condition. If a doctor is ordering tests, patients should ask why. Any billing or paperwork they receive should be double-checked. If the medications, services, and tests they received do not match their paperwork, they should be concerned. If they receive multiple bills for the same services or tests, this can also be a sign of potential fraud. A provider who offers “free” services or tests in exchange for Medicaid information is a red flag.

Each state’s attorney general can be contacted if a Medicaid client or provider suspects fraud. Alternatively the Office of Inspector General maintains a national fraud hotline. Whichever authority a person chooses, it’s important to report fraud as soon as possible. Investigations take time to develop. Although the attorney generals and inspector general do their best to discover possible fraud, patients and providers must help out as well.

Because of Medicaid’s size, everyone involved in the program must help identify suspected Medicaid fraud. Doctors and specialists along with caseworkers and clients need to be aware of possible fraud. If they suspect someone is committing Medicaid fraud, it’s crucial that they notify the proper authorities. Because of ongoing budgetary concerns, maintaining Medicaid’s level of service will always be difficult. Losing money to fraud and scams only keeps needy people from receiving the medical care they deserve. With awareness and cooperation, everyone can work together to ensure that Medicaid’s money is only helping people in need.