Medicare and Medicaid Fraud: How Whistleblowers Report It

Billing for Services not Rendered (Phantom Billing)

Phantom billing is the act of billing for services or treatments not provided to the patient. The most basic and frequent, healthcare providers use this scam to pad their reimbursement reports. A pattern of this conduct is a red flag for investigators, as phantom billing is often accompanied by additional violations.

Facilities submit claims to Medicare for services or treatments never rendered to the patient and Medicare pays them for services or care that never happen.

Proving Fraud: To prove your case you will need patient records, scheduling books and interviews (statements) from patients who did not receive the treatment billed. For patient’s the MSN (Medicare Summary Notice) provides all their Medicare Claims for every three months.

Fraudulent Billing (Upcoding & Unbundling)

Upcoding is when a provider bills private insurers or Medicare/Medicaid using a CPT Code for a more expensive treatment than was performed. Two consequences of this are higher insurance costs and inaccurate medical records.

• A good example would be if a patient visits a Doctor for a simple yearly check-up. The CPT Code for this pays the Doctor $68. However, when submitting the visit to Medicare the Doctor’s office uses a code for an expanding in-depth patient screening. This code pays $210. Result: Cheating the payout.
• Care providers will also intentionally use “upcode diagnosis”. This allows for expensive drug therapy or other services which the patient’s health require.

Unbundling is a practice by which healthcare providers change CPT comprehensive codes and component codes. Simply put they bill individually for services which are purchased for less together.

Example: Imagine a patient has an appendectomy, which costs $2400 total. Instead of billing Medicaid for the entire bundle they bill for each individual step of the procedure resulting in a medical bill of $4300.

Proving Fraud: To prove your FCA Claim of Fraudulent billing you will need patient records and statements about their health. Expert testimony and evidence from Medicare Fraud Examiners or Healthcare professionals may also be needed to refute diagnosis.

Patient Corruption (Kickbacks)

Patient’s are also active participants in the Medicare, Medicaid or Tricare scams. Doctor’s and Medical caregivers will illicit help from patients to defraud the government.

What are “kickbacks”?

Most people think kickbacks are only in the form of money - check or cash. Healthcare providers, pharma companies and medical organizations are very clever when it comes to bribing and spiffing providers. Here are some examples:

• Gift Cards
• Meals and Entertainment
• Inflated Invoice Payments
• Luxury Vacations
• Free Medical Services

How “kickbacks” work:

Pay for Play - Healthcare providers will submit false claims for services using the patient provided Medicare number. The providers tell patients to confirm they received the treatments if anyone asks. In return patients receive cash, gift cards, discounted medical care, free prescription drugs or other benefits. In this case the provider has committed two fraudulent acts - Phantom billing and Kickback corruption.

Pharmaceutical Prescription Fraud - A Doctor improperly changes a patient’s medication from one drug to another because a pharmaceutical company is providing kickbacks to them for prescribing their drug.

Proving Fraud: To prove a kickback scheme your case needs to show quid pro quo (something from something) and/or collusion between the two parties.

Billing Non-Covered Service as Covered

Doctors, caregivers and healthcare facilities submit codes for approved and covered treatments while providing unapproved and uncovered treatments for the same claim. Basically they code one thing but do another.

Example: A Doctor providing an experimental drug for diabetes that is not covered. When submitting the claim to Medicare they CPT code the treatment as a covered service. Result: Doctor has defrauded the patient and the patient’s healthcare plan.

Misrepresenting (Locations, Dates or Providers of Service)

Simply defined as Healthcare providers or clinics representing incorrectly, improperly or false records of services. This happens in three ways:

• Misrepresenting Location of Services
• Dates of Treatments
• The Provider of Care

Misrepresenting Location of Services: This false claim violation occurs when medical offices make claims of services given at their office while the actual treatment is conducted by the patients in their home.

Example: A Doctor is billing a patient’s Medicare Part B for a new series of diabetes injections. After the first round of injections the patients are given syringes to take home and self-administer. The office continues billing Medicare for in-office treatments. Result: The office has misrepresented the location of services provided. Patients should be monitored after new medicinal injections are given. The office put the patient at risk and also kept the additional pay-out of in-office treatments.

Misrepresenting Dates of Service: This type of false claim violation happens when offices submit claims for multiple days of visits when fewer visits occurred. The number is misrepresented to create more billable events. Each “visit” is treated as a separate billable event. Providers are paid more for in-office visits.

Example: Multiple services are approved and provided to the patient during one visit. The Medical provider knows by claiming the service took place on separate dates they can make more money. Result: Offices increase profits through fraudulent billing.

Misrepresenting provider of care: This false claim violation is when an actual certified Doctor or caregiver does not provide the treatment giving and signed for by the Doctor. Imagine having heart surgery and finding out it was actually performed by the operating room equipment technician.

Example: A patient goes to a mental health clinic needing to see a psychologist who can prescribe medication. They meet with a licensed clinical social worker who is not qualified to provide the care they need. The clinic represents the social worker as the psychologist. Result: Under the psychologist license an unqualified clinical social worker diagnoses and prescribes medication.

Proving Fraud: To prove any case in misrepresenting fraud scam patient records of service are needed. An attorney with experience in healthcare fraud will be able to spot fraudulent behavior. When reviewing the records, it is import to focus on the date of service not the date of claim.

Overutilization of Service (Unnecessary Care)

This is also known as overuse or overtreatment. Healthcare providers are paid more to do more (fee-for-service). Treatments, service or drugs that provide no demonstrable benefit to the patient. In some cases, Medical facilities or Doctors provide actual and continued treatments for patient that are well. During this period they bill Medicare or Medicaid for covered treatments as necessary care.

Unscrupulous Doctors will target hypochondriac and elderly patients. Alcohol/Drug rehabilitation centers and Hospice facilities are common locations for overbilling fraud.

Some facilities or doctors use overtreatment in an attempt to avoid liability for malpractice. By ordering ever test coverable under the patient Medicare they claim to have done everything they could.

Example: A physician assist notices a doctor diagnosing different patients with the same ailment. Only some of the patients receive an unnecessary treatment which does not cure the ailment. She reviews the patient’s records. Only patients with Medicare Part B are covered for the treatment. Result: The doctor is getting paid by Medicare for an unnecessary care. This is Medicare fraud and should be reported.

Prescription Drug Abuse (Falsely Issuing)

Perhaps never more relevant than today because of the current Opioid crisis. This prescription abuse is false or unneeded issuance of prescription drugs. The street value of prescription painkillers can be 10 times the normal cost. Pain medications are the most common form of prescription fraud.

Doctors and Pharmacists submit claims to a patient’s healthcare provider for medication the patient never receives or needs. The pills are then given to patients, staff, medical sales reps or everyday criminals for distribution. Result: The Doctor, Pharmacist or Facility keeps the cash from their illegal activity. Prescription painkillers continue to cause social problems. Patient’s medical records are inaccurate showing pain medication treatment they did not take.

Example: A Pharmacist realizes a patient’s Identity and Medicare ID are easily accessible in the facility’s patient database. He uses this to submit orders for the pain medication Oxycontin. Patients may not aware this is going on because they are not notified by their insurance providers. The pharmacist is selling the pain meds on the street. In this case the organization is liable for the employee's fraudulent behavior.