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Medicare Fraud Annotated Bibliography

Paper Type: Free Essay Subject: Health
Wordcount: 1835 words Published: 23rd Sep 2019

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Medicare Fraud

 Medicare fraud is a topic I am familiar with due to working in the Durable Medical Equipment industry for just over ten years in various departments including compliance. While in compliance and billing management positions I have attended webinars regarding fraud as well as kept up to date on ever-changing Medicare regulations. For this reason, I have chosen to research Medicare fraud. There are various resources available on this topic including government regulations in place to combat fraud and OIG report findings. Although Medicare fraud occurs in many forms regardless of the provider type, expanding my knowledge beyond fraud in the DME industry to all aspects of healthcare and a variety of provider types will enhance my knowledge.


Clementea, S., McGradya, R., Repassa, R., Paul III, D. P., & Coustasse, A. (2018). Medicare and the affordable care act: Fraud control efforts and results. International Journal of Healthcare Management, 11(4), 356–362. https://doi.org/10.1080/20479700.2017.1401277

 In 1965 the Medicare program was put into place by President Lyndon B. Johnson. This program first included health insurance coverage for Americans 65 and over. Further expansion was made to include Americans with disabilities under the age of 65, those with End-Stage Renal Disease, the inclusion of private insurance companies to manage Medicare benefits and prescription drug coverage. Over the years the government’s spending on Medicare has increased due to an aging population and a greater number of those with disabilities. Spending has also increased due to Medicare fraud. In 2011 alone, an estimated $98 billion in Medicare spending, was identified as fraudulent. One facet of The Affordable Care act of 2010 (ACA) put into place by President Barak Obama is to combat healthcare fraud. The ACA is helping the Centers for Medicare & Medicaid Services (CMS) to cut spending but also increased funding to fight fraud by $350 million. Harsher sentencing for those who commit fraud, strict screening for providers, restructuring reimbursement methodology, and task forces that investigate potential fraud are just a few of the regulations the ACA has enacted. Even with these efforts, the future of the Medicare program is at risk. The number of healthcare providers willing to participate in the Medicare program is shrinking due to the regulatory burdens. Also if the current trend continues, by the year 2022 around $100 billion dollars per year will be spent combating fraud.

The use of data to stop Medicare fraud : hearing before the Subcommittee on Oversight of the Committee on Ways and Means, U.S. House of Representatives, One Hundred Fourteenth Congress, first session, March 24, 2015. (2016). Retrieved from https://www.govinfo.gov/content/pkg/CHRG-114hhrg21375/pdf/CHRG-114hhrg21375.pdf#?

Historically, Medicare has used the “pay and chase” method, which means claims are paid and then investigated later to identify any improper or fraudulent payments. This method has enabled providers to easily file fraudulent claims and continue to operate. The Fraud Prevention System was put into place by CMS in 2011, which analyzes data to identify potentially fraudulent claims. Pre-payment review audits are one method the FPS utilizes to identify fraudulent claims. When the test pilot of the pre-payment review program was launched half of the providers involved showed a change in their billing patterns. Although CMS is still primarily relying on the “pay and chase” method other methods are also used to ensure high risk providers are not enrolled in the Medicare program. Routine site visits (some unannounced), periodic licensure verification, fingerprinting of owners, and criminal background checks have also been put into place which resulted in the purging of 500,000 providers from the Medicare program. With 100,000 Americans becoming eligible for Medicare every day, it is of utmost importance that CMS further strengthen their Fraud Prevention System.

Goldin, N. J. (2017). Wrongly identified: Why An Actual Knowledge Standard Should Govern Health Care Providers’ False Claims Act Obligations to Report and Return Medicare and Medicaid Overpayments. Washington University Law Review 94(5), 1295-1342.

The most common, but less publicized cases of fraud and abuse are violations of the False Claims Act (FCA). Violations of the FCA include, but are not limited to: billing for services not provided, billing for too many units of service, billing for incorrect procedure codes which results in higher reimbursement, and filing of claims with lack of medical necessity. In order to prove a violation of the FCA has occurred, a prosecuting attorney must show evidence that the accused intended on committing the fraudulent act and should have been aware that it was wrong. Also added to the list of violations included in the FCA was the act of not repaying funds internally identified as overpayments. To some providers, identifying overpayments may not be blatantly obvious due to the complexity of claim filing. Some providers do intentionally misfile claims. Employees who are witness to such acts and come forward are called whistleblowers. The FCA also allows whistleblowers to provide information regarding false claims. Any funds recovered are shared with the whistleblowers as an incentive.

Meyers, T. J. (2017). Examining the network components of a Medicare fraud scheme: the Mirzoyan-Terdjanian organization. Crime, Law and Social Change, (1–2), 251. https://doi.org/10.1007/s10611-017-9689-z

 In recent years organized crime has increased in healthcare. Organized crime involves three or more people. For example, the Mirzoyan-Terdjanian Organization stole the identities of several physicians and filed false claims using those physician’s information. As a result, over $100 million dollars in Medicare claims were paid to the organization. Fake clinics were established after setting up Medicare provider accounts with the stolen physician identities starting in 2006 in 25 states across America. The fraudulent activity was identified by the recognition of unusual billing patterns. Claims the organization sent to Medicare included procedures that did not match the provider type for the physician. Claims were also filed for unusual and expensive procedures.

Matthew Herland, Taghi M. Khoshgoftaar, & Richard A. Bauder. (2018). Big Data Fraud Detection Using Multiple Medicare Data Sources. Journal of Big Data, Vol 5, Iss 1, Pp 1-21 (2018), (1), 1. https://doi.org/10.1186/s40537-018-0138-3

 Fraud, waste, and abuse, according to the FBI, account for 3-10% of U.S. healthcare spending annually. Medicare accounts for 20% of U.S. healthcare spending. The majority of healthcare fraud is identified by manually auditing claims and records to find suspicious billing patterns and false claims. With the volume of claims Medicare receives manually auditing is inefficient. Utilizing massive amounts of data to identify patterns and errors with a process called data mining is much more relevant with the current advances in technology. Medicare, over the last several years has provided “Big Data” datasets each year that include provider information, procedure types, payment amounts, quantities billed and various other key data. Data mining studies are ongoing of these datasets. The results of these studies will be key in the battle against fraud.

Buck, I. D. (2019). A Farewell to Falsity Shifting Standards in Medicare Fraud Enforcement. Seton Hall Law Review, 49(1), 1. Retrieved from http://ezproxy.memphis.edu/login?url=http://search.ebscohost.com/login.aspx?direct=true&db=edb&AN=133534630&site=eds-live&scope=site

The Affordable Care Act of 2010 put a new payment model into place for some providers treating Medicare beneficiaries. Instead of fee-for-service, Medicare established a patient value or outcome based reimbursement methodology. This change has helped to combat fraudulent overbilling practices of the past. The Medicare Access and CHIP Reauthorization Act of 2015 passed and paved the way for other enforcements. The Quality Payment Program is also in place and reimburses providers based on cost, quality, outcome, and advancing care information. Providers who give quality care according to the metrics of the program are entitled to higher reimbursement rates than those providers who perform poorly. Protecting patient health information (PHI), e-prescribing, electronic patient access, and the promotion of exchanging health information are also metrics that are measured. All of these metrics combat fraud, waste, and abuse of Medicare funds.

Medicare Fraud and Abuse: Compliance programs to protect your practice, staff and patients. (2018). Medical Economics, (24), 39. Retrieved from http://ezproxy.memphis.edu/login?url=http://search.ebscohost.com/login.aspx?direct=true&db=edsghw&AN=edsgcl.570275776&site=eds-live&scope=site

Just over $40 billion in Medicare payments in 2016 were “improper”. These payments were not all necessarily outright fraudulent. The main reasons for these “improper” payments were no documentation, lack of sufficient documentation, no medical necessity on file, and improper coding. The OIG and CMS suggest that providers form compliance programs that provide employee training on compliance matters, have written policies and procedures and enforce them, appoint a compliance professional, develop effective communication, internally audit, and respond to identified issues. Educating staff in proper compliance procedures can reduce improper payments for keying errors as well as overbilling or upcoding. Having a compliance manger or officer is key in avoiding Medicare fraud. Compliance departments are in place to stay up-to-date on regulations and coverage guideline criteria. The compliance manager or department then relays the information via training or other methods of communication to pertinent staff within the practice.


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