How Medicare Fraud Costs Taxpayers $60B a Year


Medicare fraud in the U.S.A. is a bleeding ulcer on the side of a taxpayer funded healthcare system.  Each year the total of tax revenue lost to unethical business practices, and outright scams within the healthcare industry, are estimated at over $40 billion. To put that into perspective that’s enough money to end world hunger for two years according to the United Nations.

Medicare Fraud

The FBI, the Department of Health and Human Services, the Department of Justice, and local law enforcement agencies across the country are pulling their resources to come up with a solution to curb the rampant abuses. In some cases, they have been quite successful. The group of authorities has created several teams of investigators called the “Medicare Fraud Strike Force”, and in July of 2015, a coordinated sting operation that covered 17 cities netted 243 arrests; each related to Medicare scams. The DOJ announced at a press conference that aside from the arrests, the operation uncovered $712 million in false medical billings, and was the largest successful raid of its kind against this type of crime.

Already, a great deal of attention is being given to the business investment sector, which has flooded into the healthcare industry in recent decades. They have monetized the industry, which use to be the realm of niche non-profit companies, and generous churches. They game the system in some ways by establishing their nursing care facilities where they are better able to control who receives hospice care; a big ticket item when it comes to filing Medicare claims.

However, nursing home and hospice abuses are not the only sources of the criminal activity responsible for the massive bloodletting of taxpayer dollars. Investigators have grown suspicious of claims being filed by some companies, but when they go to the address listed on the paperwork the business simply isn’t there. These bold scammers aren’t stopping there, either. Apparently the system is so flawed, that it cannot even recognize false pharmacies that charge for prescription drugs that are never sold, and medical supply shops that do not exist.

Even if the companies do actually exist, the possibilities to commit fraud is so tempting that even some clinics are opened up for the explicit purpose of syphoning money out of the health care system. These types of fly-by-night operations are popping up everywhere in states with older populations such as Florida, considered ground zero for the fraud industry.

At its core, Medicare is based on a system of trust. No one in the 1960’s ever believed that anyone would dare defraud something designed to aid the elderly. Medicare is essentially an automated system that reads claims by the thousands. If all the T’s are crossed, and I’s dotted, it simply pays the claim. Time is often a factor in medical claim payouts, and many are required to be paid within 30 days. All criminals need to do is fill out these fraudulent documents and send them in. Then, scammers just wait for the government to send them a check. It doesn’t take much intelligence to learn how to take advantage of the system, nor has there been much risk involved until investigators began to see the numbers.

5 Tips on How to Prevent HealthCare Fraud

Everyone should be concerned about Medicare fraud and other health services scams. Individuals can fight the rising cost of health care by being diligent, and reporting any suspected wrongdoing to the proper authorities. A brief Google search will reveal plenty of local, and national resources for reporting fraud suspicions and of course fraud whistleblower reward programs.

  • Never allow anyone who is not authorized to see your Medicare number. Treat it like it’s your bank account number.
  • Always thoroughly read a policy, or plan before agreeing to join it. If you do not understand it, take it to someone who can help explain it to you so you can.
  • Don’t allow anyone to coerce you into accepting medical treatment, or equipment that you know you do not need.
  • REMEMBER! Neither Medicare nor Medicaid will ever send associates to your home to sell you products. If anyone claims that they are from either agency while attempting to sell you medical supplies report them immediately.
  • Finally, never be afraid to report a suspicion of fraud. If it doesn’t seem right, it likely isn’t. These criminals depend on you to do nothing.

Fighting health care fraud and bringing down the high cost of health care in America is everyone’s concern and it is the duty of every citizen to do whatever they can to end it.

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