Medicaid pays for approximately 20% of all healthcare expenses in the United States, over $600 billion each year. Well over 500,000 healthcare providers, ranging from hospital chains to individual doctors to ambulance helicopter pilots, receive payments from Medicaid every year. Inevitably a few of the providers will try to defraud the program to line their own pockets. Medicaid fraud costs the taxpayers of the United States billions of dollars every year.
Medicaid Fraud and Abuse
Applications for reimbursement by Medicaid require a healthcare provider to sign a certification stating that the information contained in the application is true to the best of the provider’s belief. In most situations they must also certify that the procedure or product for which reimbursement is sought is medically necessary.
Medicaid fraud encompasses any situation where a healthcare provider makes a false certification in order to take money from the program they have not earned. Of course, the money is taken not only from the government, but also from the payroll taxes of every worker in America. Even worse, some kinds of Medicaid fraud endanger patients.
Medicaid Fraud Examples
Listing all the forms of fraud that greedy providers have tried would be impossible. Here are a few of the most common forms:
- False claims that services were provided, when they were not. A typical example would be billing for a medical checkup that did not occur. Recently, there have been instances where pharmacists falsely claimed that opioids had been provided to Medicaid-eligible patients, when in fact the pharmacist held them for personal use.
- False certifications that a medical procedure or a prescription was medically necessary. For example, a doctor may order chest x-rays of healthy patients, ostensibly to check for tuberculosis, when there is no reason to suspect that tuberculosis is present. In some cases, such as unnecessary surgical procedures, fraud can endanger patients as well as line a doctor’s pockets.
- “Upcoding,” where a provider completes a relatively simple procedure and seeks reimbursement for a more lucrative procedure. For example, a hospital might bill for an anesthesia where a patient had only received a sedative for minor surgery. For services that are billed on an hourly basis, such as physical therapy, misrepresenting the number of hours that a patient received treatment is considered upcoding.
- A variation on upcoding is misrepresentation of the proper billing rate for a healthcare provider. A common example is permitting a nurse to handle a procedure that should be performed by a doctor, and billing for the nurse’s services as if he were a doctor. In this example, the fraud may also endanger the patient.
Medicaid Fraud Penalties
When the government has proved that a fraud occurred, the False Claims Act requires the wrongdoer to repay three times the amount of its illicit profits. The same act also permits whistleblowers who inform the government of instances of Medicaid fraud to receive a portion of the government’s recovery.
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