Medicare fraud occurs when people or companies purposely bill Medicare for services that were never provided or received. For example, your Medicare number could be used to bill Medicare for services and supplies you did not need, want, order or receive.
Medicare fraud most commonly occurs in:
- Billing for institutional facilities such as nursing homes, residential facilities, hospitals and hospices (Medicare Part A).
- Billing for physician visits and services (Medicare Part B).
- Billing for durable medical equipment (DME), such as wheelchairs, body jackets, incontinence supplies, etc. (Medicare Part B).
- Improper marketing through phone calls, door-to-door sales and flyers (Medicare Part C — Medicare Advantage and Medicare Part D — prescription drug benefit). For more information, see 9 Simple Ways to Avoid Medicare Marketing Scams.
Committing Medicare fraud is a felony, punishable by law. While most people are honest with the Medicare program, a few aren't. Medicare fraud can be committed by providers, suppliers, recruiters, companies and beneficiaries, among others.
Providers Commit Fraud When They:
- Submit bills for services not provided. "Gang visits" are common, occurring when a provider visits a nursing home and bills for services for all or nearly all of its residents. The provider may not perform the service for all of the residents but bills as if he/she had. Alternatively, the provider may perform a service regardless of whether each resident needs it.
- Upcode a service. This occurs when a provider submits a bill for surgery when only a bandage was placed over a cut.
- Unbundle services. This occurs when a provider submits separate bills for lab services that combine three or four tests, which are intended to be billed as one service. As a result, Medicare pays the provider more for each service than if the services were billed as a group.
- Bill non-covered services as covered services. This occurs when a provider bills a service such as routine toenail clipping (non-covered service) as foot surgery (covered service).
Suppliers & Recruiters Commit Fraud When They:
- Bill Medicare for different equipment than what the beneficiary received.
- Bill Medicare for home medical equipment after it is returned.
- Solicit, offer or receive a bribe or kickback. Recruiters often stop Medicare beneficiaries on the street or knock on their doors, offering money and promotional gifts as incentives to take "free" medical exams. Afterwards, they may give the beneficiary a list of durable medical equipment (DME) they do not need.
Companies Commit Fraud When They:
- Offer a Medicare drug plan that hasn't been approved by Medicare.
- Use false information to mislead beneficiaries into joining Medicare plans.
- Do not follow Medicare marketing rules. This occurs when a company offers Part D prescription plans at no cost to beneficiaries, even though Part D plans require beneficiaries to pay premiums. For more information, see Medicare Marketing Regulations.
Beneficiaries Commit Fraud When They:
- Let someone use their Medicare card to get medical care, supplies or equipment.
- Sell their Medicare number to someone who bills Medicare for services not received.
- Provide their Medicare number in exchange for money or a free gift. Note: In some cases, beneficiaries may unknowingly commit fraud in this way.