What is Medicare Fraud?

Medicare fraud occurs when a hospital, nursing home, doctor's office, hospice care facility, ambulance service, pharmacy, rehabilitation center, or any other type of healthcare provider overbills Medicare.


Who can report Medicare fraud?

Medicare fraud whistleblowers are almost always healthcare professionals. They are commonly employed as hospital administrators, nurses, hospice or nursing home workers, ambulance drivers, pharmacists, or as any other type of healthcare professionals.

Receive a financial reward for your information.

Healthcare professionals may be entitled to a significant financial reward for becoming Medicare whistleblowers. Learn about receiving a financial reward for your information here.


History of healthcare and the False Claims Act
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Let’s take a brief look at the meaning and birth of the False Claims Act, or qui tam statute.
The wholesale fraud of dishonest suppliers to the Union Army during the Civil War gave birth to the False Claims Act. In fact, for many years, it was referred to as the Lincoln Act, because it became law during his presidency.

Its intent was to give private citizens the right and ability to file suits on behalf of the US government whenever they spotted fraud. In exchange for their bravery and duty, they were rewarded with a part of the recovered funds or fines imposed on those successfully prosecuted.

The law has been revised over the years and in 1986, it received new power when those filing the claims, referred to as relators, became eligible for higher payouts, up to as high as 30% of recovered funds or fines.

First of all, let’s look at the broad definition of fraud as used by the law. It means that a contractor or provider of goods or services to the US government has knowingly presented a “false claim” for payment to the United States. It covers both federal and state funds when they are directly or indirectly used to purchase goods or services.

Qui Tam fraud cases interestingly enough reflect the areas where the government is spending the most money. Just as the war effort during the Civil War produced the most cases, so too, during the heavy expenditures in the defense areas during the 1980s, most cases involved defense contractors.

Today, with the rising expenditures in healthcare, many government fraud cases center around Medicare and other national health care programs, such as TRI-CARE, the health care program available to military personnel and their families.

Let’s now take a look at some general types of current medical fraud which are routinely discovered, investigated and prosecuted.

  • Incorrect billing. An example might be billing Medicare for new equipment for home care, a wheelchair for example, but providing a used chair for the patient. Or, alternatively, billing for expensive equipment but providing lesser and cheaper equipment.
  • Phantom billing. This involves billing for tests or procedures that are not even performed.
  • False certification. An example would be a drug or equipment supplier completing a Certificate of Medical Necessity when it’s supposed to be filled out by a physician.
  • Inappropriate services. Billing for tests or procedures that are either inappropriate or unnecessary.
  • “Bribing patients”. This involves offering free services or supplies in exchange for a Medicare patient’s Medicare number.
  • Charging for equipment and supplies which are never supplied.
  • Double billing involves charging more than once for the same service. For instance, providers may bill using an individual code and again as part of an automated or bundled set of tests.
  • Code jamming. This practice involves laboratories inserting a fake diagnosis code to make a patient eligible for Medicare or Medicaid coverage.
  • Upcoding. This practice involves inflating bills by using diagnosis billing codes that show the patient suffers from medical complications and/or needs more expensive treatments. An example might involve billing for name-brand drugs but supplying generics or listing treatments as having been for a more severe diagnosis than was reality.

Federal and state investigators encounter these and many other examples every day as they continue to keep up with the constant new cases of fraud.

It’s been remarked that the rewards of healthcare fraud are much more lucrative than drug-dealing and the consequences if caught much less onerous.

The government, in cooperation with citizen whistleblowers has scored major wins however.

In fact, more than 4,000 Qui Tam suits have been filed since 1986, when amendments strengthened the law to make it easier and more rewarding for private citizens to sue.

Government recoveries have exceeded $6 billion as a result of the suits, with realtors/whistleblowers receiving more than $960 million for their efforts.

Report Medicare fraud here.

Are you a healthcare professional and have information about Medicare fraud? Help stop government waste and abuse, and get rewarded for your efforts. Our attorneys have significant experience representing healthcare industry whisteblowers. Complete the secure form on this page or call 1-800-581-1790 for a free no obligation consultation with a lawyer.