Another Banner Year For Medicare Fraud?

Another Banner Year For Medicare Fraud?

By Mary Johnson, editor

“Hello seniors!” the voice bellows. “Medicare covers a remarkable new device that can give you freedom from lower back pain! Hold the phone to find out how to get your free, Medicare-covered back brace. ” While free usually sounds good, this call is worse than a pain in the lower backside. It’s a scam.

During 2014 and 2015, I got plenty of these calls, and I wasn’t even eligible for Medicare. The caller asks the recipient to “verify” that he or she is a Medicare beneficiary, a ploy to get Medicare numbers. These numbers might later be used to file false claims. I immediately hang up on any such calls, something that healthcare advocates and Better Business Bureaus around the nation are warning the public to do also.

But recently the Government Accounting Office (GAO) confirmed our worst fears at TSCL, that Medicare fraud and overpayments are spiraling out of control. For fiscal year 2014, the Department of Health and Human Services estimated about $60 billion in erroneous payments. And it looks as though 2015 is likely to be another banner year.

Improper Medicare payments are costing not only the federal government, but beneficiaries as well. About $13 of every $100 spent on Medicare costs is due to waste, fraud and abuse. Worse, the federal government estimates that government spending on Medicare will increase by 8.6% per year over the next three years. The improper payments by Medicare are not sustainable.

Improper payments typically occur in any of three different ways:

  • Wasteful services. A new study indicates that, in a single year, up to 42% of Medicare patients got at least one medical procedure they didn’t need. This typically occurs when doctors order screening tests too frequently, or when invasive, potentially risky treatments are used despite research indicating that those treatments are no better than traditional medications in improving your health.
  • Abusive billings. Some of the nation’s biggest companies, including major drug manufacturers, health insurers, hospitals, and other providers, have come under investigation for abusive business practices. Although the menu is long and the schemes complicated, invariably the aim is to boost profits by padding the bill. Recently, major drug companies have come under investigation for buying their competitors, then boosting prices of older generic drugs, sometimes in excess of 500%.
  • Fraud. In 2015 Attorney General Loretta Lynch announced the largest criminal healthcare fraud takedown in the history of the Department of Justice, resulting in charges against 243 individuals. And the schemes are becoming dangerous for older Americans. In one notable case, Doctor Farid Fata was sentenced to 45 years in federal prison for egregiously over-treating patients by pumping poisonous chemotherapy drugs into patients for years, telling them they had cancer — when they didn’t.

Federal spending in Medicare is expected to significantly increase in coming years, so it is critical that actions are taken to reduce improper payments in these programs. To learn more about how to spot and prevent Medicare fraud, visit