Medicare Fraud & Abuse

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How does Medicare define fraud?  It is when you knowingly submit or cause to be submitted false claims or making misrepresentations of facts to obtain a payment from the federal government, which you are not entitled to.  It is also when you knowingly solicit, receive, offer, and/or paying remuneration to induce or reward referrals for items or services that are reimbursable by federal healthcare programs.  Furthermore, it is when you are making prohibited referrals for certain designated services.


Examples of Medicare fraud include the following:

  • Billing Medicare for services you did not render
  • Knowingly billing for services at a level of higher complexity than the services you had provided.
  • Falsifying records to show that you furnished services that were not provided.
  • Paying for referrals of beneficiaries of federal healthcare programs.

What is Medicare abuse?  It is described as the practice to either directly or indirectly causing unnecessary costs to Medicare.  Examples of abuse include:

  • Billing for unnecessary medical services
  • Excessive charges for services or supplies
  • Upcoding or unbundling codes to gain higher payment

The common fraud and abuse laws in healthcare are the False Claims Act (FCA), Physician Self-Referral Law (Stark Law), and the Anti-Kickback Statute (AKS).  The violation of these laws may result in the non-payment of claims, Civil Monetary Penalties (CMPs), exclusion from federal healthcare programs, and criminal and civil liability.

CMPs for violating the FCA may include treble damages sustained by the government as a result of the false claims, plus penalties from $11,409.00 to $22,819.00 per false claim filed.  Individuals or entitles submitting false claims may also face fines, imprisonment or both.  In addition to the civil and criminal actions brought by law enforcement agencies, Medicare also has additional administrative remedies for certain fraud and abuse violations.  One such action is the exclusion of participation in federal healthcare programs.  It is important to note that states (currently 33 states) also have their own false claims acts.  Additionally, the federal government, state agencies, law enforcement, private insurance companies, and anti-fraud associations share their data with each other.  Therefore, committing fraud and abuse can get you in trouble with multiple entities.

The Centers for Medicare and Medicaid Services also partners with an array of contractors (Comprehensive Error Rate Testing Contractors, Medicare Administrative Contractors, Recovery Audit Contractors, Zone Program Integrity Contractors, United Program Integrity Contractor) who identify and monitor its program vulnerabilities.

The main mission of the Office of Inspector General (OIG), established in 1976, is to protect the integrity of the Department of Health & Human Services (HHS) programs, as well as the health and welfare of the beneficiaries of these programs.  It operates through a nationwide network of audits, investigations, inspections, and other related functions.  The OIG is authorized to, among other things, exclude individuals and entities who engage in fraud and abuse from participating in federal healthcare programs.

The Healthcare Fraud Prevention and Enforcement Action Team (HEAT) was established by the Department of Justice (DOJ), OIG, and HHS to build and strengthen existing programs, combatting Medicare fraud while investing resources and technology to prevent fraud and abuse.

As a provider, you are bound to many regulations that are in place for healthcare.  And if you are a Medicare provider, you are bound to numerous regulations by multiple governmental agencies.  As a result, it can become burdensome for you and your staff to keep up with the constant regulatory changes in our industry.

Physician Revenue Navigators is a premier company that provides revenue management for healthcare entities. Contact us to learn more about how we can help you navigate through Medicare regulations.

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