Health care fraud: up to 10% of your medical expenses


Health care fraud is hardly new. However, according to a recent report from BDO, an accounting and consulting firm based in the U.K., it is responsible for up to 10% of all health care costs in the U.S.  For Medicare specifically, fraud represents $60 billion, or 10% of annual Medicare expenditures.

$1 billion Medicare fraud case just announced

The Justice Department recently announced the largest health care fraud case ever brought against individuals in this country. Philip Esformes, owner of about 30 nursing facilities in Florida has been charged with defrauding Medicare and Medicaid of more than $1 billion.

Preying on the elderly: At the core of the fraud scheme, prosecutors maintain, was cycling 14,000 older men and women in and out of nursing homes and assisted living facilities–whether they needed medical care or not. Esformes is also accused of giving narcotics to elderly patients. That way, patients had to stay in the facilities even longer, to treat their addiction.

Esformes and two other defendants billed Medicare for medical care, medical equipment, and high-priced drugs that patients either didn’t need or never received. The scheme involved paying kickbacks to doctors, pharmacists, health care consultants and other medical personnel.

The amount of cash taken by Esformes over the last 14 years: more than $4 million. The money paid for a “$600,000 watch, the leasing of private jets and chauffeured limousines, and periodic trips with escorts to a Ritz-Carlton Hotel in Orlando,” as reported in the NY Times.

What you can do to help prevent health care fraud

Prosecutions for health care fraud have increased recently. But $100 billion in estimated annual fraud costs is still a huge number. As is the case with other types of fraud–such as identity theft and e-mail scams–each of us can help protect ourselves and others.

Here, from the Centers for Medicaid & Medicare Services, are the key types of health care fraud,  some key ways in which all of us can help prevent, stop, and report the fraud that costs us so much money, and contributes to steadily rising health care premiums.

  • Take notes: Keep track of the dates and times of your doctors’ appointments, what occurred, and what treatments or medications were prescribed during those appointments.
  • Check statements: If you–or your parents–are covered by Medicare, check every statement that comes in.  See if Medicare was billed for diagnostic tests or services that the doctor never provided; look for anything that seems unusual.
  • Say “No” to freebies: If anyone approaches you anywhere and offers free services, groceries, or anything else in exchange for your Medicare number, say, “No, thanks” and walk away.
  • Never give out your Medicare number on the phone: If anyone phones and asks you to participate in a  “health survey,” then asks you for your Medicare number, hang up.
  • Ask questions: If a doctor, other health care provider, or a supplier tells you that medical equipment or services are free, and that all you need to do is give them your Medicare number, be suspicious. Ask how the cost of the equipment or treatments will be paid. Then ask yourself if the answer seems reasonable.
  • If you suspect Medicare fraud of any type, call 1-800-Medicare.
  • If you suspect any other type of health care fraud, call 1-800-HHS-TIPS.

See more posts on how to protect yourself or your parents, from becoming fraud victims.

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