Medicare fraud puts future benefits at risk.
Yet another example of how older adults and people with disabilities are taken advantage of came roaring into sharp relief this week. The FBI announced the take-down of a $1.2 billion scheme to defraud Medicare by sending unnecessary medical equipment to Medicare recipients. While taxpayers bear the primary cost of these all-too-frequent abuses, Medicare recipients may actually be denied or have reduced access to benefits if their medical identity is used to scam the system.
Authorities estimate that, this time, there were hundreds of thousands of Medicare patients victimized by the nationwide scheme. The FBI and Health and Human Services announced charges against 24 individuals, including chief executives or employees of five telemedicine companies, the owners of dozens of durable medical equipment companies, and three licensed medical professionals. About 130 medical equipment companies have also been implicated.
The scheme was “expansive and sophisticated” according to a statement by an assistant attorney general for the Justice Department’s criminal division (3). Scammers allegedly used call centers in the Philippines and Latin America to contact Medicare beneficiaries, convincing them to order unnecessary medical braces. Doctors were paid to write prescriptions for the equipment by telemedicine companies who had been paid bribes by the call centers. Often Medicare patients had only spoken briefly via phone or video conference with the prescribing doctor, whom they never met.
Why it matters.
Medicare recipients whose medical information was used in such a scheme can "find that they do not qualify for long-term care or other insurance if their medical records have fraudulent treatments and tests,” (4) according to Julie Schoen, director of the California Senior Medicare Patrol. Senior Medicare Patrols, which operate in every state, are part of a federally-financed, anti-Medicare-fraud program, funded by the U.S. Administration for Community Living.
Not only can it affect the care that individual Medicare patients receive, this kind of fraud increases everyone’s Medicare premiums. Furthermore, Ms. Shoen notes, “When scams get particularly popular, Medicare cracks down on eligibility, making it more difficult for those who really do need, say, a motorized wheelchair or hospice services” (4).
According to prosecutors, this particular scam compromised “the personal information of hundreds of thousands of Medicare beneficiaries across the country, which could be used in future schemes” (2).
Medicare fraud is a constant risk.
This Medicare scheme is one of the largest health care frauds in U.S. history, and, unfortunately, it’s just another instance of the increase of two criminal trends – Medicare fraud and elder fraud.
- June 2018: Over $2 billion in false billing, related to opioids and other dangerous narcotics, was uncovered (7).
- July 2017: A $1.3 billion medicare fraud scheme, in which 115 medical professionals, including doctors, nurses, and pharmacists, were charged (5).
- October 2010: Over $100 million in false reimbursements when suspects stole the identities of doctors and thousands of patients, using them at over 100 fake health clinics across 25 states (4).
True Link’s own study on elder fraud revealed that seniors lose $36.48 billion each year to elder financial abuse, most of it from deceptive but legal tactics designed specifically to take advantage of older adults.
What you can do to protect clients, loved ones (and yourself).
At True Link, we work to support professionals – fiduciaries, guardians, trustees, attorneys and others who are tasked with handling the financial affairs of their clients. If you know someone who might be at risk, consider whether this type of professional could help reduce their risk of becoming prey to a Medicare fraud scheme or any other scam that results in financial loss.
There are several basic precautions everyone can take to avoid financial fraud and identity theft. Most of these scams start with a telemarketing call. So, make it your policy never to give out any personal information over the phone, especially credit card or insurance information. If you’re speaking with a doctor or other medical care professional over the phone or in a video consultation, they should already have whatever insurance and personal information they need.
Similarly, legitimate free medical services do not require handing over your insurance information. If, during a phone call, you’re offered medical equipment, supplies or services that you don’t already receive or aren’t sure you need, don’t accept them.
Be especially vigilant during Medicare enrollment periods. Scammers will be offering fake Medicare and Medicare D prescription drug plans, or services and products not actually covered by Medicare. Verify any insurance plan you are considering on the plan finder at Medicare.gov. If it’s not there, it may not be legitimate.
Whether or not you have a particular concern, checking your credit report regularly is now essential, as companies often don’t report data breaches that may have included your information until months after the fact.
There are also some best practices to avoid Medicare fraud specifically. Medicare.gov offers helpful tips for taking precautions to avoid fraud, recognizing fraud when it happens, and reporting it (6). Here are the basics.
- Protect your identity. Your Medicare number is as valuable to fraudsters as your credit card or Social Security numbers. Guard it accordingly – and report a lost or stolen Medicare card immediately.
- Keep records. Make a note of the dates you received health care services and save all receipts and statements from providers to check for mistakes.
- Compare your records with Medicare statements. Make sure the dates and services on your calendar match those on the statements you get from Medicare to ensure the services listed are the ones you received and that the details are correct.
- Don’t put off checking your claims. The sooner you see and report errors, the sooner fraud can be stopped.
If you do find something listed in your claims that doesn’t match your records, fraud is a possibility.
- Call the provider’s office to ask about any charges for which you don’t have a record. The statement may be correct but worded differently from your notes, there may have been a billing error – or it might be evidence of fraud.
- If you suspect Medicare is being billed for health care you didn't get, or you can’t identify the provider on the claim, report it to Medicare at 1-800-MEDICARE (1-800-633-4227). TTY users can call 1-877-486-2048. Medicare fraud can also be reported to the Office of the Inspector General online or at 1‑800‑HHS‑TIPS (1‑800‑447‑8477). TTY: 1‑800‑377‑4950.
For some families, a True Link Card adds a layer of protection for loved ones. Although the card won’t prevent someone from giving out a Medicare number over the phone, the card can block payments attempted over the phone. This filter is a tool that card administrators employ to protect against telemarketers in general and would ward off a scam if payment was sought as part of the scheme.
Large-scale sting operations remind us that this kind of fraud is always a possibility in our system. In spite of efforts by the authorities to prosecute perpetrators, other schemes will emerge and, in addition to the taxpayer cost, they can cost Medicare recipients care or equipment they need. It is up to all of us to be vigilant to keep those costs as low as possible.
About True Link.
True Link is a financial services company on a mission. We help protect those at risk of financial loss when using cash or traditional banking products. True Link Cards include spending filters so that clients and loved ones can be protected when spending their money, as well as tracking and reporting features to help ensure security, compliance and administrative ease. We also offer investment management services to pooled trusts, including special needs trusts.
Sources used in this post:
- NPR (National Public Radio 04/10/2019
- NBC News (04/09/2019)
- NYT (New York Times, 04/09/2019)
- NYT (10/30/2010) (New York Times)
- HHS (Health and Human Services)
- U.S. Department of Justice
Disclaimer: True Link Financial Advisors, LLC is an Investment Adviser registered with the SEC and is a wholly owned subsidiary of True Link Financial. Registered Investment Advisers are legally empowered to provide investment advisory services only to residents of the states in which they are registered or where an exemption or exclusion from such registration exists. Nothing in this post should be construed as a solicitation to sell a security.