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What is Medicare Part A Fraud?

Medicare Part A fraud costs the government billions yearly. What’s worse, wasted funds reduce the quality and availability of care.

Posted by Ann Snook on December 4th, 2019

In 2018, a for-profit hospice company agreed to pay $1.24 million to resolve fraudulent billing allegations. The company committed both Medicaid and Medicare Part A fraud by providing services to patients who did not have a life expectancy of six months or less, a requirement for federal health care program coverage for hospices.

Medicare Part A fraud, waste and abuse (FWA) cost the US government billions of dollars each year. What’s worse, wasted funds reduce the quality and availability of care for patients who need it.

 

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What is Medicare Part A?

 

Medicare Part A is the hospital and inpatient care part of the plan. While coverage varies, the Centers for Medicare & Medicaid Services (CMS) explains that Part A generally covers:

  • “Inpatient care in a hospital
  • Skilled nursing facility care
  • Inpatient care in a skilled nursing facility (not custodial or long-term care)
  • Hospice care
  • Home health care”

 

In addition to the healthcare services provided during a covered hospital or facility stay, Medicare Part A also covers drugs administered to the patient during the stay.

 

RELATED: What is Medicare Part B Fraud?

 

What is Medicare Part A Fraud?

 

CMS defines Medicare Part A fraud as “intentionally submitting false information to the Government or a Government contractor to get money or a benefit.” Part A fraud covers a wide range of deceptive behaviors from corruption to improper billing. Providers, beneficiaries and contractors may work alone or together to defraud the program.

 

Beneficiaries

 

  • Medical identity theft: Someone steals a beneficiary’s name, Medicare card number, or other information. They then use the data to receive Medicare Part A services to which they aren’t entitled. This type of fraud may be committed by a Medicare beneficiary whose plan doesn’t cover the services they need or a person who isn’t covered at all.
  • Receiving services they aren’t entitled to: A beneficiary uses “fraud or deception, or . . . not correctly reporting assets, income or other financial information” in order to receive healthcare services that aren’t covered by their Medicare plan.
  • Lending or selling Medicare information: A beneficiary lends their Medicare card to someone else to help them get healthcare services. Or, they sell their Medicare card or number to a provider. The provider then bills Medicare for a service not rendered, giving the patient a financial kickback in return.

 

RELATED: What is Medicare Part D Fraud?

 

Providers, Suppliers and Contractors

 

  • Billing for services not provided: A doctor or other medical service provider bills Medicare for a service that they did not provide to the beneficiary.
  • Billing for services not covered: A doctor or provider bills for a service covered by Medicare but provides a service to the beneficiary that is not covered. For example, they might perform a routine toenail clipping but bill Medicare for foot surgery.
  • Unnecessary services: A doctor knowingly orders services that are medically unnecessary for a beneficiary so they can bill Medicare.
  • Upcoding: A doctor performs one healthcare service covered by Medicare but bills for a more expensive service. For example, a beneficiary could receive a 5-minute consultation with a nurse but the provider bills for a 30-minute doctor’s examination.
  • Unbundling: A doctor bills Medicare separately for services that should be bundled together, such as a surgery, hospital stay and follow-up appointments.
  • Corruption: Doctors, nurses, equipment suppliers and insurance brokers may pay or get paid bribes or kickbacks for a variety of reasons. For instance, they may offer a beneficiary a gift or payment for taking a medically unnecessary test. A broker might bribe or coerce a beneficiary into using their plan even though it isn’t the best fit for their needs.

 

Check out our webinar “Healthcare Fraud Investigations: Challenges and Solutions” to learn about emerging fraud schemes and their effects.

 

Part A Waste and Abuse

 

Medicare Part A fraud is just one of the ways that bad actors waste federal funds. Waste and abuse also contribute to the billions of dollars in annual losses.

Waste occurs when a provider doesn’t use Medicare resources efficiently. This results in unnecessary expenditures that could have been better spent elsewhere. Examples include keeping a beneficiary in the hospital longer than is necessary or ordering excessive lab tests.

Abuse includes many of the same actions as fraud, but without the knowledge and malicious intent. A doctor could accidentally code a service incorrectly, for instance, or bill Medicare for a service that isn’t actually covered by a beneficiary’s plan.

However, all Medicare Part A fraud, waste and abuse (FWA) is treated the same under the law. The CMS explains that “no specific intent to defraud is required to violate” the Federal Civil False Claims Act, a law that protects the government from overpaying for goods and services.


Ann Snook
Ann Snook

Marketing Writer

Ann is a marketing writer at i-Sight Software. She writes about issues related to investigations of fraud, employee misconduct, corporate security, Title IX, ethics & compliance and more.

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