Medicare is a government-sponsored health insurance program. It is administered by the Social Security Administration for United States citizens who are age 65 and over or for those people who suffer from a disability. The program is paid for and funded by the United States federal government.
Originally, Medicare was established with two specific costs: hospital costs and non-hospital costs. The program has evolved from its originally established position to now include additional coverage options, such as prescription drug coverage. Anyone who is covered by Medicare hospital insurance also has the ability to pay small monthly premiums to obtain additional federal medical insurance.
Both employees and employers alike contribute to Medicare by paying taxes. There is no limit on the amount of taxable income that is subject to Medicare, as Social Security tax applies to nearly every job in the country. However, as the economy has changed over the years, there has been a growing concern over the number of people who are committing Medicare fraud.
What is Medicare Fraud?
When someone defrauds the Medicare system, the act can be describing an individual, company or large corporation who is acting intentionally to steal money from the federal government. The most common form of Medicare fraud is called “phantom billing,” which refers to a medical provider who is billing Medicare for medically unnecessary procedures or even procedures that were never performed.
There are reports about thousands of Medicare recipients who have been fraudulently billed for durable medical equipment, such as oxygen generators, breathing machines, air mattresses, orthopedic walkers or wheelchairs.
For instance, instead of getting the nice, new motorized chair that the physician ordered, a patient may receive an old and dangerous model of the motorized chair – due to fraud. The medical equipment provider still bills Medicare for the full price of the new motorized chair, but the patient gets stuck with something far less than what was ordered by the physician. Fraudulent Medicare schemes like these involve billions of dollars each year in bogus claims.
Fighting Medicare Fraud
The fight against fraudulent Medicare billing schemes is almost insurmountable for the government, as it is extremely difficult for them to detect the initial phases of the activity. By the time the federal government is aware of a fraudulent scheme, massive amounts of money have already been funneled out of the healthcare system. The sheer number of Medicare reimbursement claims that are submitted on a daily basis would make it impossible for authorities to properly scrutinize each one, looking for any indication of fraudulent billing or inconsistencies.
The U.S. government has used the federal False Claims Act to investigate a wide range of healthcare providers, from small one-physician offices, clinical laboratories and managed care organizations, to global pharmaceutical companies, nursing homes, hospital chains and home health agencies.
The False Claims Act has been hugely successful in holding parties responsible and deterring healthcare fraud–whistleblowers are a significant factor in that success. When private citizens become aware of fraudulent activity, such as Medicare fraud, they can choose to come forward and report what they know. Under the False Claims Act, a citizen may bring suit on behalf of the government. The suit is filed under seal, giving the government ample time to investigate the claim and decide whether it wants to join the case.
There are financial incentives for whistleblowers within the provisions of the False Claims Act. These permit whistleblowers to share in the government’s monetary recovery. When private whistleblowers bring healthcare fraud to the attention of the government, they receive from 15 to 30 percent of the total recovery.
The fallout from Medicare fraud is felt by everyone. For starters, the activity hurts U.S. taxpayers, as it results in higher healthcare costs. These costs, in turn, lead to higher taxes across the board.
In addition, the very patients who desperately need Medicare services suffer due to the fraudulent activity. As more and more money is drained from the system, Medicare has no choice but to cut services and coverage for its patients. By coming forward, reporting Medicare fraud and filing a False Claims Act suit, whistleblowers are able to do their part in putting an end to the corruption.