Social Security & Medicare Questions: Scam Awareness

Social Security & Medicare Questions: Scam Awareness

Q:  I've received numerous automated phone calls offering "free" Medicare-covered items like back braces and diabetes supplies.  I'm not 65, not eligible for Medicare yet and I'm on the national DO NOT CALL list.  Are suppliers allowed to do this?

A:  No.  Did the supposed healthcare equipment supplier or doctor tell you that equipment or service won't cost you anything, and then say they only need your Medicare number to determine your eligibility?  If so, this sounds like a common fraud or abusive Medicare billing scheme.  Here's how it works:

You receive a call that instructs you to press a number on your telephone keypad to learn how you can receive a Medicare-covered back brace (or other type of supply).  A live agent comes on the line and asks for your personal information, including your name and Medicare number to determine if you are eligible.  Fraudulent suppliers and providers steal your information and use your Medicare number to submit phony claims to Medicare, even if you never order a thing.

Medicare's extraordinarily high reimbursement rates for durable medical equipment like back braces and power wheel chairs have made it a particularly lucrative target for crooks and abuse billing practices.  The Centers for Medicare and Medicaid Services recently reported that an astonishing 66% of all durable medical equipment claims were improperly paid in the government's fiscal year 2012, costing Medicare more than $6 billion.

A letter to the editor of The Topeka Capital Journal describes one such case of Medicare's over-compensation problem.  The writer said that after receiving a back brace for treatment of spinal stenosis, the local back therapy center billed Medicare $1,300.  Yet the writer found the same brace from the same manufacturer online for $159. Medicare approved $924 for the brace.  The writer said that when he contacted the Medicare fraud unit he was told that $924 was the correct Medicare - approved payment to providers for the brace and was told there was nothing Medicare could do about the over-pricing.

That's changing this year due to new Medicare rules that require suppliers to engage in competitive bidding to supply seniors with this equipment.  A two-year pilot of competitive bidding in nine cities succeeded in lowering Medicare's durable medical equipment costs by a third.  Lower costs for Medicare should also mean lower co-pays for seniors.

But you can help put a stop to the suspicious phone calls— report them!  Here's the info that you will need:

  • Get the spiel.  Keep pen and paper close to your phone and the next time you get the call, write down the offer.  Without giving away any of your own information stay on the line to talk to an agent.  What is the item or service and what are the terms?
  • Get the provider's name and any identifying number.  If the agent asks "Who am I speaking with?" answer with your own question.  First ask the caller for the name of their company and the phone number, "in case you get cut off." You can give a first name but avoid giving out any actual personal information like your Social Security or Medicare number, full name, date of birth and address.
  • Note the date and time of day of the call.  Also note if you have a clear line or if the call sounds like it’s coming from overseas.  Does the person you are talking to have trouble with the language, have a heavy accent, etc.?
  • Note any other relevant information and then hang up.

Report suspected fraud or abusive phone calls to: HHS Office of Inspector General: 800-447-8477

Online: Report Fraud Online

HHS Tips Hotline
PO Box 23489
Washington, DC 2006-3489

Watch a video about Medicare fraud.


Sources:  2012 Improper Payment Rates, Centers for Medicare and Medicaid Services, November 21, 1012.  "New Medicare Rule Aims To Curb Waste And Fraud," Merrill Goozner, The Washington Post, March 24, 2012.  "Medicare Costs," John Moore, The Topeka Capital-Journal, October 18, 2011.