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Friday, 09 May 2014 20:24

Reducing Medicare Fraud Billing Featured

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Reducing Medicare Fraud Billing

Chapter 1


The healthcare bill passed by President Obama aims to cut down more than $ 500 billion during his term and the future Medicare spending. However, a better option would have been developed that aggressively target Medicaid and Medicare fraud that would have saved more that the targeted amount of savings. New cases of Medicaid and Medicare scam do form the highlights of daily news. These cases have been bilked millions of dollars by the government particularly the taxpayers. The federal authorizes have recently charged more than 100 healthcare providers, comprising of nurses and doctors from various cities for cheating $452 million out of Medicare. National Health Care Anti-Fraud Association views Medicare frauds as one of the most lucrative crime in America. The association indicates that more than $68 billion are lost every year to fraudulent acts (Anti-Fraud Association, 2013).


These crimes end up victimizing the American taxpayers. A senior agent working as an investigator for Medicare fraud in Miami shows that there are entire organizations and groups of peoples who are only dedicated to committing crimes through stealing from Medicare (CBS News, 2009)

Problem statement

 In 2010 federal officials charged 94 people for phony claims adding to $251. This is not a new problem. Serious cases of Medicare fraud billing started as early as 1996. With the evolvement of Medicare technology and program, so does the fraud scheme. This is a way of perpetuating criminal activities. In 2007, Medicare Fraud Strike Force officials found about one third (481) of the businesses in Miami did not even exist, yet they had billed theses businesses $237 million of Medicare services. The indictment charges that have so far been recorded include $230 million for home care fraud, more than $49 million in ambulance fraud and about $100 in mental health fraud. These are among other charges that involve millions of dollars incurred in fraudulent means (MNT, 2012).

Medicare program, in 2008, paid $462 billion to medical providers operating in the United States. It is, however, unknown what percentage of the benefits was paid to fraudulent claim submissions. The complexity and size of the Medicare program is the main aspect that makes it vulnerable to criminal activities. At the same time, there are few safeguards that will help to [prevent fraudulent claims that are paid. Hospitals and doctors have shifted to better paying codes for the past few years. It is highly likely that this practice has become a costly and extensive service than the actual delivered services. Medicare regulators are mainly worried that theses escalating coding level is due to electronic health records and any person can easily create fake detailed files of a patient by a simple click of the mouse. This results to billing abuses and errors. This challenge has to be dealt with now. My research will try establishing strategies to fix, regulate and medical groups and doctors be held accountable.

Purpose of study

This study will illustrate healthcare fraud prevalence happening in Medicare services. The research will analyze how payment and billing structures of Medicare attributes to its vulnerability to fraudulent activities. I will identify issues that can be addressed to as to elevate the widespread fraud cases. It is possible to identify, prevent and prosecute Medicare fraud through the collaboration of various beneficiaries, such as HHS, DOJ, and OIG U.S.(Department of Justice, 2008). The beneficiaries are the major tools to be used for identifying fraud. For instance, OIG has the authority to exclude providers from being part of Medicaid and Medicare programs and can impose civil penalties. These cases can be referred to DOJ to carry out prosecution. The prevalence of Medicare fraud can be attributed to low level of sentencing compared to other sentences involving crime activities (The Associated Press, 2009).

Significance of problem

Identifying the specific areas within the payment and billing structure that allow healthcare providers to defraud Medicare in an easy way will help in making appropriate recommendations on possible changes and fraud prevention within the structure. By focusing on selected regions within United States that have commonly been reported, especially in Detroit and Miami, have lead to the arrest of many healthcare providers. However, such cases have not put an end to criminal acts in other areas or prevent the perpetrators of fraud schemes moving to other regions. It is essential to develop a comprehensive framework that will prevent fraudulent billing in Medicare and Medicaid program so as to avoid victimizing the taxpayers in this country (Blesch, 2009).

Methods and procedure

The methodology for this study will be the use of secondary data. I will find evidence from the Federal Bureau of Investigation (FBI), Government accountability Office (GAO), Centers for Medicare & Medicaid Services (CMS), among other government entities dealing with preventing and reducing the prevalence of Medicare fraud billing in forming unified Medicare task force. I will provide a theoretical framework for Medicare fraud causes and its deterrence measures. The framework will help to strengthen the argument that there is the need to increases sentences for the convicted culprits dealing with billing Medicare in fraudulent ways. The routine activities theories and rational choice are used to further explain fraudulent billing of Medicare and a way of establishing a dedicated and strong Medicare taskforce and implementing measures for strengthening claim pre-payment used to identify fraudulent claims.

Results summary

Currently, there is no accurate measure to determine the extent of fraudulent billing in Medicare. Little data is found from the analysis of Department of Justice, CMS, FBI, and other government agencies reports. This makes it difficult to find out the extent of fraudulent billings and efficiency of the modern mechanisms used against fraud. It is necessary to implement a unit dedicated to preventing, prosecute and identify Medicare fraud. The complex and large size structure of the Medicare system calls for the need to form an entity that will lead in anti-fraud efforts. This unit is expected to develop a system that will enable an overview of claims data available nationwide so as to fight fraud. This system has not been established. Other ways of preventing this crime involved need to increase the sentences to criminals and excluding them from the program. These are other effective ways of reducing fraud billing instances in Medicare.


CBS News. (2009). Medicare fraud: A $60 billion crime. Retrieved from Http://www.cbsnews.com/stories/2009/10/23/60minutes/main5414390.shtml?

On October 9, 2013

Blesch, G (2009) Feds targeting modern healthcare billing fraud. 39 (21), 12-12

Centers for Medicare & Medicaid Services (2009). Transmittals. Retrieved from


On October 9, 2013

Forbes (2012) Medicare and Medicaid fraud are costing n taxpayers billions. Retrieved from www.forbes.com/sites/merrillmatthews/2012/05/31/medicare-and-medicaid-fraud-is-costing-taxpayers-billions/ On October 9th 2013

MNT (2012) &$430 million false billing Medicare fraud 91 people charged. Retrieved from


On October 9, 2013

Press Associated (2009) violent criminals to Medicare fraud.

Retrieved from


On October 9, 2013

United States Department of Justice. (2013). Fact

Sheet: Phase one Medicare fraud strike force Miami-Dade County, Fla. Retrieved, from Stop Medicare Fraud:


On October 9, 2013


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