Medicare fraud is a significant issue that affects millions of people and costs billions of dollars each year. Fraudsters exploit the system in several secret ways, often taking advantage of complex rules and incentives within the healthcare system.
### Upcoding and Risk Coding
One common method of fraud involves **upcoding**, where healthcare providers use diagnosis codes that make patients appear sicker than they actually are. This practice allows providers to receive higher reimbursements from Medicare. For example, a doctor might diagnose a patient with a condition that requires minimal treatment, but the insurer could override this diagnosis with a more severe one, leading to increased payments.
**Risk coding** is another tactic used to maximize payments. Insurers like UnitedHealth encourage doctors to document as many health conditions as possible, even if they are not actively treated. This practice inflates the patient’s risk score, which determines how much Medicare pays for their care. Insurers can use software to suggest additional diagnoses, and doctors may benefit financially from documenting these conditions.
### Insurer-Driven Diagnoses
Medicare Advantage insurers often push for certain diagnoses to be recorded in patient charts, even if they are not necessary. This practice is known as **insurer-driven diagnosis**. Insurers may use data to identify patients with high “coding opportunities” and encourage their doctors to document these conditions. This can lead to unnecessary medical tests and treatments, further increasing costs.
### Flawed Screening Tests
Some companies, like Semler Scientific and Matrix Medical Network, market flawed screening tests to Medicare Advantage patients. These tests, such as the QuantaFlo test for Peripheral Arterial Disease (PAD), can produce false-positive results. This leads to unnecessary medical visits and tests, inflating federal payments by an estimated $1,000 to $2,000 per patient per year.
### Bogus Referrals
Fraudsters also use **bogus referrals** to drive up costs. These are unnecessary or inappropriate referrals made for financial gain. For instance, a vascular surgeon might receive many referrals for PAD that are not clinically warranted. This not only wastes resources but also burdens patients with undue anxiety and unnecessary medical procedures.
### Government Impersonation Scams
In addition to these practices, scammers often impersonate Medicare representatives to trick older adults into sharing personal information or paying for fake services. These scams can lead to identity theft and financial loss.
### Impact and Investigations
The impact of these fraudulent practices is significant, with billions of dollars lost each year. The U.S. Justice Department has launched investigations into companies like UnitedHealth, alleging that they have engaged in civil fraud by inflating diagnoses and billing Medicare for unnecessary treatments. Despite these allegations, UnitedHealth maintains that its practices help detect diseases early and save healthcare costs.
In summary, Medicare fraudsters exploit the system through upcoding, insurer-driven diagnoses, flawed screening tests, and bogus referrals. These practices not only waste taxpayer money but also burden patients with unnecessary medical procedures and anxiety. Efforts to combat these frauds are ongoing, with investigations and legal actions aimed at holding perpetrators accountable.
