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Deep Dive: Medicare Fraud and Abuse Part 2

The number of people enrolling in Medicare is rising from 39.7 million in 2013 to 55.7 million in 2015. In fact, according to the CommonWealth Fund, there are projected to be 81 million enrollees by 2030.

The second part of this Medicare fraud and abuse series is designed to examine some of the most common ways that Medicare fraud and abuse manifest themselves.

Billing Fraud
This is a common abuse perpetrated on Medicare patients. This is when a medical facility bills you or the government for a service, treatment, or medication you never received. The guilty party can be your doctor padding your claims to increase their profit or it can be the result of identity theft.

No Medical Necessity Fraud
No Medical Necessity Fraud can be one of the most difficult to identify. In a typical case, a medical provider will submit a claim for medications, ambulatory services, or medical devices that the patient did not actually need. In extreme cases, victims can even be subjected to dangerous surgeries with little to no possible benefit. While it helps unscrupulous providers pad their pockets, it puts patients at risk and places extra costs on the Medicare system. Since most patients are inclined to trust their doctor's opinion, it can be difficult to know whether a given medical procedure is actually necessary.

Procedure Unbundling
Many important surgeries are made up of a number of essential steps, but each step is considered part of the larger procedure -- they are bundled. But many times, a doctor can receive a greater amount of money by billing for each individual step separately. By doing this, the doctor can increase their own profits, leaving you and the Medicare system will be facing an undue burden.

Pharmaceutical companies have huge profit margins on many of their basic products, despite the availability of less expensive generic options. That is because the pharmaceutical reps often provide incentives for doctors to prescribe their medications, including financial benefits, among other things. At its worst, doctors will prescribe medication that offers no real benefit for a patient in order to fulfill their part of the agreement made with the pharmaceutical companies.

There are a number of different ways Medicare and Medicare Advantage patients may be defrauded. While the fraud might seem harmless to some, certain kinds may have life threatening results for the patient. But don't worry, in the next blog of this series, we will look into what you can do to prevent health care fraud.


The Commonwealth Fund, "Medicare's Numbers Game," April 2015

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