Thursday, January 25, 2024

Medicaid Fraud: What is Medicare and Medicaid fraud?

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Medicare and Medicaid Fraud

Medicare and Medicaid fraud means a medical provider like a doctor, dentist, hospital, clinic care provider, or nursing home – makes a dishonest reimbursement claim. The most popular types of Medicaid fraud include billing for unnecessary procedures or procedures that are never carried out, for unnecessary medical tests or tests never executed; or for unneeded stuff.

medicare and medicaid fraud

What is Medicare and Medicaid fraud?

Medicare and Medicaid fraud refers to unlawful work getting biasedly high payments from government-funded medical care programs.

Medicare or Medicaid fraud cases can file against anyone who directly or indirectly causes fraud in the medical care programs. 

Medicare and Medicaid frauds include a copy in state-administered medical care programs, based on federal matching money, and because most states have now accepted local versions of the False Claims Act.

Medicare or Medicaid Fraud breaks the False Claims Act. The qui tam law provisions of the False Claims Act allow persons and organizations with proof of Medicare and Medicaid Fraud against federal programs or agreements to prosecute the offender on behalf of the United States government. 

In qui tam actions, the government has the right to negotiate and join the effort. If the government rejects, the private complainant may continue on his own. Most Medicare or Medicaid False Claims Act cases also include claims under state qui tam laws modeled on the federal False Claims Act.

The Medicaid Fraud Control Units (MFCUs) work in 49 states and the District of Columbia to layout inquiries and faults related to possible fraud.

Most MFCUs work as part of the Attorney General’s office in that state and should be self-sufficient and independent from the state’s Medicaid office.

What actions are considered Medicare and Medicaid fraud?

There are many types of Medicare and Medicaid fraud. Common examples include:

  • Billing Medicare and Medicaid for services not provided.
  • Billing for services provided to unsuitable persons.
  • Damaged or illegal pricing of drugs.
  • Failure to observe with “best pricing” in the Medicaid program.
  • Failure to properly enroll qualified patients in a Medicaid-sponsored program.
  • Nursing home mistreats and mistreats patients.
  • Unlawful or unethical marketing of drugs.
  • Cheating at pharmacies.
  • “Off label” marketing of drugs.
  • Paying kickbacks to have doctors, hospitals, or other people prescribe certain medications or otherwise bill Medicare and Medicaid.
  • Bribe to take the business.
  • Bribe to get prescriptions.
  • Perform irrelevant medical treatments.
  • Improper referrals or self-dealing.
  • Present to the federal government a false or dishonest Medicare and Medicaid claim for payment.
  • Purposely using a false record or statement to get a Medicare or Medicaid claim paid by the federal government.
  • Cooperate with others to get a false or fraudulent Medicare or Medicaid claim paid by the federal government.
  • Knowingly using a false record or statement to cover, avoid, or minimize a responsibility to pay money or transmit property to the federal government.
  • Performing irrelevant tests or giving wrong guidelines is known as ping-ponging.
  • Charge separately for services usually charged at a package rate, known as unbundling.
  • Give benefits to which the patients who receive them are not allowing, using fraud, or not correctly reporting income or other financial details.
  • Make repayments to illegally completed claims.

The Difficulties of Working Medicare and Medicaid Fraud

Medicare and Medicaid fraud is a multibillion-dollar exhaust on a system that is already costly to maintain. The departments that look after these programs have internal staff members observing activities for signs of Medicaid fraud. In addition, some external auditors are responsible for evaluating suspicious claim patterns.

To help prevent Medicaid fraud related to recognizing theft, Medicare carried out a new program in 2018. Medicare associates started to receive new ID cards with a Medicare Number rather than the participant’s Social Security number.

Identifying and preventing Medicaid fraud is essential for the people and departments that watch these critical programs. In addition, the wasted funds lost to Medicaid fraud and other illegal strategies represent resources that can use to support participants who need support.

Below are the best two examples for talking about surgeons who criticized Medicare and Medicaid fraud.

The complaint concerns the University of Pittsburgh Medical Center and the head of its neurological surgery department for falsely billing Medicare and Medicaid for operations.

The complaint is about James Luketich. He is doing multiple complex surgeries simultaneously by going alternating between patients. As a result, he does not participate in critical surgeries while keeping patients under unnecessary anesthesia.

The government claims Luketich and the University of Pittsburgh Medical Center broke the rules and regulations that prevent physicians like Luketich, who make teaching services within a medical school, from billing federal health insurance programs for such surgeries. It also alleges that the practice harmed patients.

The government claimed that Luketich’s workouts have severely harmed patients by continuing their surgeries and time under anesthesia, increasing the risk of complications.

According to the complaint, Luketich proceeded to schedule and conduct concurrent operations.

Luketich is one of UPMC’s most significant sources of income, the government said, taking in tens of millions of dollars per year. As a result, it is exploring unspecified financial losses.

Here is the second example.

Dr. Vasso Godiali is a blood vessel surgeon in Michigan who composed a $65 million Medicare fraud.

Federal prosecutors charged Godiali with submitting false claims for placing stents in dialysis patients and treating arterial blood clots. The surgeon also allegedly inflated and submitted false claims to Medicare, Medicaid, Blue Cross, and Blue Shield of Michigan, ultimately driving up healthcare costs and wasting taxpayer money.

He supposedly cleaned the money through six companies and used the interests to pay estate taxes on his Houghton Lake, Michigan house.

The federal district attorney also filed a civil claim inquiring about $40 million from accounts managed by Godiali correlated to four real estate purchases.

A Medicare fraud charge can bring ten years of prison time and a supreme penalty of $250,000 on any two counts. If convicted of money laundering, Godiali would serve a maximum sentence of 20 years and be fined up to twice the $49 million he allegedly laundered. He faces five counts.

FAQ on Medicare and Medicaid Fraud

  • How to report Medicaid fraud?

Please report any Medicaid fraud or abuse you may be aware of or suspect so that a thorough investigation can be conducted. Learn where and how to report. Start by selecting the one that most accurately describes your circumstance:

  • Dial (855)727-6721 to reach the Alliance’s confidential Fraud and Abuse Line.
  • Dial (800) 662-7030 to reach the Division of Medical Assistance at the DHHS Customer Service Center.
  • Dial (877) DMA-TIP1 or (877) 362-8471 to contact the Medicaid Fraud, Waste, and Program Abuse Tip Line.
  • Call the Fraud Line at (800)447-8477 of the Health Care Financing Administration Office of Inspector General.
  • Dial (800) 730-TIPS or (800) 730-8477 to reach the State Auditor’s, Waste Line.
  • Visit the DHHS Customer Service page, fill out the confidential online complaint form regarding Medicaid fraud and abuse, and submit it
  • What happens if you get caught lying to Medicaid?

The following is a list of the possible outcomes if you are found to have lied to Medicaid:

  • The DSS HRA Bureau of Fraud Investigations will send you an investigation letter.
  • The funds you got from the HRA must be returned to them.
  • You risk up to seven years in prison.
  • A fraud conviction might result in a felony on your record and prevent you from ever getting Medicaid again.
  • Your Medicaid benefits will end.


  • What entities can be considered legally guilty of Medicaid fraud?

According to CMS, healthcare entities and providers are people or organizations accepting Medicaid funding for rendering services. They include:

  • Managed care organizations for Medicaid (MCOs)
  • Contractors \sSubcontractors
  • State personnel
  • Medicaid recipients and enrollees in Medicaid managed care

Any of these are capable of engaging in Medicaid fraud and being found responsible for it.

  • How long does a Medicaid fraud investigation take?

Although each suspected Medicaid fraud incident may have unique circumstances, an investigation may take many weeks or months.

  • How much money can be gifted before Medicaid?

We frequently deal with individuals who think the IRS and Medicaid gifting laws are identical. The IRS permits annual tax-free contributions of up to $15,000 per person. All donations made in a given year are subject to gift tax under the Code. For many people, gifting during life is a strategy to transfer money and lower their taxable inheritance at death because the first $15,000 presented to each individual in any given year is excluded from the gift tax. The rules for Medicaid gifts vary.

  • Is Medicaid based on income or assets?

Medicaid is a joint federal and state program that aids those with low incomes and few assets in paying for their long-term care and medical expenses. The truth is that seniors can hold a wide range of assets and remain eligible. It only requires studying the regulations and creating a legal and financial strategy to ensure they are followed.

Remember that every state manages different Medicaid programs and has standards for each program’s financial and medical eligibility. Medicaid considers income and assets when determining financial eligibility, although this article will concentrate on asset constraints.

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I am a medical biller, a blogger and have 20 years of experience in medical billing, medical billing management, and medical assistant. My background includes positions as a clinical medical assistant, medical records technician, medical office manager, biller, and coder. I am certified by the American Academy of Professional Coders (AAPC) as a Certified Professional Coder (CPC) and by the Practice Management Institute (PMI) as a Certified Medical Office Manager (CMOM). As an office manager/biller/coder, I was a member of the Michigan Medical Group Managers, Michigan Medical Billers Association. I also served as a committee member of the Michigan Osteopathic Association of Practice Managers Education Committee.

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