The federal government has recovered almost $20 billion in the last nine years in Medicare and Medicaid fraud cases under the False Claims Act (FCA). This amount is set to increase substantially after efforts to step up investigation and prosecution of medical fraud were recently announced.
Provisions of the FCA allow the government to recover three times the actual damages, along with penalties ranging from $10,957 to $21,916 for each false claim submitted for government funds.
Most civil lawsuits are brought to the attention of the government by citizen whistleblowers. If you would like more information about how you as a whistleblower can be protected and rewarded, you can download our Essential Guidance On Qui Tam and Whistleblower Lawsuits. This helpful guide includes key terms, common types of Medicaid and Medicare fraud, negative consequences for whistleblowers, and a fraud checklist: if you suspect fraud, what do you do next?
The cost of medical fraud
According to the National Health Care Anti-Fraud Association, healthcare fraud costs the US around $68 billion each year. This is almost 3% of national healthcare spending, which is $2.26 trillion a year. The organization cautions that their medical fraud statistics are conservative estimates and that fraud could be as high as 10% or $230 billion of annual healthcare expenditure.
Projected national health expenditure is expected to grow at an average rate of 5.6% each year from 2016 to 2025. If medical fraud statistics continue to climb at the current rate, fraud will cost the country many hundreds of billion dollars each year—one of the reasons the government is anxious to get healthcare fraud under control.
What is medical fraud?
Some of the most common types of medical fraud are:
- Performing improper or unneeded medical procedures in order to increase Medicare reimbursement.
- Forging physician signatures when such signatures are required for reimbursement from Medicare or Medicaid.
- Billing for unlicensed or unapproved drugs. (According to a 2005 report prepared by the National Center on Addiction and Substance Abuse (CASA) at Columbia University, the number of US citizens who abuse controlled prescription drugs doubled from 7.8 million to 15.1 million between 1992 to 2003.)
- Automatically running a lab test whenever the results of some other test fall within a certain range, even though the second test was not specifically requested.
- "Lick and stick" prescription rebate fraud and "marketing the spread" prescription fraud, both of which involve lying to the government about the true wholesale price of prescription drugs.
- Misrepresenting dates and locations of services.
- Waiving of deductibles and/or co-payments.
- Corruption in the form of kickbacks and bribery.
Another type of medical fraud that needs a special mention because it’s growing at speed and has the ability to affect us all, is medical identity theft. This is when thieves steal a consumer’s personal information, including their Social Security number and their health insurance number, for the purpose of submitting fraudulent claims against the victim’s health policy. Stolen information, sometimes by employees at medical facilities, can also be resold on the black market or stolen by hacking into a medical database or physically breaking into a medical facility.
The latest medical identity theft statistics available—the Fifth Annual Study on Medical Identity Theft conducted by the Ponemon Institute in 2015—put the number of patients affected by medical identity theft so far at 2.32 million Americans with a 22% increase in 2014 alone.
Not only is medical identity theft stressful and costly for victims, it can also jeopardize their health if a victim’s medical records are overwritten by the thief’s medical information, like blood type or prescribed medicines. The study found that 65% of victims paid an average $13,500 each to resolve the crime and it took individuals around 200 hours to correct their compromised personal information.
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Mississippi medical fraud statistics
In a move to combat increasing levels of medical fraud, Mississippi enacted a law in April this year that will see the state employing a private contractor to create a new computer system to review and regularly check the eligibility of people participating in Medicaid. In Mississippi, 760,609 individuals are covered by Medicaid; that’s about 25% the state's population.
This contractor will verify recipients’ identity, that they do in fact live in Mississippi, are working if they’re able to, and that they use their money responsibly—in other words, that really do need the benefits of Medicaid.
The bill is expected to save the state $4 million to $5 million which might have been lost to medical fraud without these checks and balances in place.
The remedy for medical fraud
Efforts to combat medical fraud are and will continue to be dependent on honest citizens being willing to do the right thing, which is blowing the whistle on misuse of medical funds, equipment, medications, treatments, and services.
Organisations like the Medical Identity Fraud Alliance are working with the healthcare industry, consumers, and regulators to make sure that funds and services end up where they’re meant to be and not in the pockets of greedy individuals. If you know of someone who could be guilty of medical fraud, it might be your turn to do the right thing and come forward with information.
Correct reporting of your case could award you with some of the recovered funds
Coxwell & Associates investigates FCA cases across the state of Mississippi. If you are an employee at a facility and have witnessed any type of fraudulent Medicare or Medicaid billing, please contact Chuck Mullins at Coxwell & Associates. Report your case correctly and you could be awarded 25 to 30% of the recovered funds. We will also look at any other type of government fraud cases across the state so please reach out to us for advice.
Disclaimer: This blog is intended as general information purposes only, and is not a substitute for legal advice. Anyone with a legal problem should consult a lawyer immediately.