Senior Medicare Patrol
Some Common Health Care Fraud and Abuse Schemes
Home Health Agencies and Hospice Programs, What are they?
health agency (HHA) is an organization that makes skilled nurses and other
is designed for people with a terminal illness who are likely to die within
Home health agencies and hospices are vulnerable to fraud because most beneficiaries or consumers do not understand Medicare requirements for coverage. In the past, and as recently as 1996, beneficiaries have not received Medical Summary Notices (MSNs) forms for home health services. There is no co-pay or deductible for these service
An Example of Fraud
certified home health agency received a complaint from a beneficiary
the visits were
false. In fact, the beneficiaries' signatures were forged by the nurse. In'
I several cases, the nurse misspelled the beneficiaries' name three
different times. The nurse later admitted to the fraud when approached by
the home health agency.
The Fraud Schemes -Home Health Agencies and Hospice Programs
Billing for services not provided. Billing for more visits than provided.
Billing for services to consumers who do not meet the strict definition of homebound.
Billing housekeeping or custodial services as skilled nursing or therapy services- .Unfair marketing practices--some home health agencies have offered incentives, such as free groceries or free transportation to beneficiaries in exchange for their Medicare number or for switching to its agency.
Kickbacks--some home health agencies have offered cash or other benefits to physicians or referring beneficiaries and or signing treatment plans for
Some hospice programs have received duplicate payments, billing both Medicare
Some HHAs have provided home health aides to patients of assisted living
Some board and care facilities have the same ownership as HHAs. In these
Some registered nurses have provided care to their relatives and then billed the service as home health care.
Some agencies have been found to have ties with durable medical equipment
Signs of Fraud In Home Health Agencies and Hospice Programs
Beneficiaries or consumers who are not homebound but who are receiving home health services.
Beneficiaries or consumers who are not terminally ill but are enrolled in hospice.
Durable Medical Equipment Suppliers
A wheelchair is durable medical equipment (DME), as is a walker or a
commode. It is
Medical equipment suppliers are likely targets for fraudulent operators
Examples of DME Fraud
A DME supplier may offer a motorized scooter to a beneficiary under the
pretense that Medicare pays for it. The supplier then bills Medicare for an
electric wheelchair with attachments instead of the scooter. Medicare
usually does not pay for scooters because they are considered a convenience
and not a medical necessity.
A DME supplier may supply a lower-cost manual wheelchair to a beneficiary I
and yet bill Medicare for a more expensive electric wheelchair with
In some cases, a beneficiary may no longer need a wheelchair , perhaps due
to recovery or death. Meanwhile, the supplier continues to bill Medicare,
even if the wheelchair has been
The fraud looks like this
Unscrupulous DME suppliers use a variety of means to obtain Medicare numbers, some examples include:
Calling beneficiaries under the guise of conducting a health survey. One of the question is "What is your Medicare number?"
Offering beneficiaries a "free health screening" like blood pressure check or a cholesterol test and asking for the Medicare number .
Paying beneficiaries for their Medicare number .
Offering beneficiaries "free" services or supplies like milk or bread or clothing in exchange for a Medicare number
Obtaining lists of Medicare beneficiaries and their Medicare numbers from nursing homes or board and care homes by selling administrators or operators on "new" Medicare benefits that will help their facility .
Lymph edema pumps are supplied to patients who did not meet the medical
Oxygen concentrators have been provided to patients who have no need for oxygen. Because Medicare requires patients to be tested by an independent lab before paying for oxygen, suppliers have engaged in schemes with physicians and labs to falsify results.
Suppliers offer "free" case of milk supplements or groceries, then bill Medicare for more costly enteral or parenteral supplies.
Signs of Fraud or Abuse in Durable Medical Equipment Suppliers
Look for the same type or brand of durable medical equipment provided to all or most residents of a nursing home or other long-term care facility .If all residents have the same brand of air fluidized beds, then chances are it has been ordered unnecessarily.
Consumer may not be able to use the quantity of supplies or equipment received. Look for vast quantities of supplies.
Supplier conducts health screenings and medical surveys to obtain Medicare numbers. Business is generated by telemarketing or offers of "free" items or cash.
Did the supplier waive co-pays and deductibles in the absence of financial need? Beware of "FREE" anything. It is usually billed to Medicare or other insurers.
homes are facilities that offer 7 day-a-week 24 hour-a-day services
Homes may be a temporary placement for individuals who, after
Why does health care fraud occur in nursing homes and other long term care facilities?
in nursing homes and other long term care facilities because the residents
Stories of Nursing Home Fraud and Abuse
In spring of
1994, an elderly resident was moved from Tucker House, a nursing home in
north Philadelphia, to a local emergency room. The resident showed signs of
serious neglect. He was "dehydrated, malnourished, severely anemic, and his
led to a federal prosecution for violation of the False Claims Act.
Ultimately, a fine of $ 600,000 was paid, the nursing home's management
changed and a detailed consent decree monitoring the operation of the
facility was put in place.
case, an ophthalmologist billed for treating 88 nursing home residents in a
single day. This is impossible because it would take 57 hours and 45 minutes
to examine 88 patients and perform all the procedures billed for .
instances, mental health professionals visit a nursing home or other long
term care facilities, host a social event and bill this as group therapy.
Fraud Schemes in Nursing Homes
Billing for medical supplies not provided to the patient. When the patient
Billing social activities or life services as psychotherapy.
Irrigation kits are often supplied to nursing facilities for ostomy patients in quantities far greater than needed. In many cases, sterile kits are not medically necessary .Many nursing homes break kits down and add individual components to their own supply rooms.
Suppliers have billed Medicare for custom-fitted body jackets, when in reality the items supplied are plain, wrap-around -corsets secured by
"Gang visits" is the term used to describe a group of practitioners such as optometrists, podiatrists, etc., stopping by all or most patients in a facility without providing any service, but billing as if a service had been provided.
Most of the patients do not have any prior symptom or conditions warranting the practitioner's service.
Providing medically unnecessary physical, occupational and speech therapies (PT, OT, ST) .Therapies often supplied to large groups of patients but billed as it provided to individual patients. For example: A physical therapist spends 30 minutes with a group of 10 patients. Medicare is billed for 30 minutes of PT for patient.
Signs of fraud in Nursing Homes and other Long Term Care Facilities
dehydrated and neglected residents of nursing homes and other long term care
facilities may indicate neglect of services that are being billed to the
for individual residents used for other residents. Kits held in extremely
large supply in storage areas. This may be a sign that unnecessary supplies
are being stockpiled-
(PT/OT/ST) being provided to groups of patients. These services may
be billed to Medicare as if provided individually.
Therapies, such as psychotherapy, being provided to patients who cannot benefit from the services, particularly those with Alzheimer's Disease or those in a coma
Patient file access provided to persons who are not actual practitioners for specific patients.
The same medical equipment for every patient may indicate fraud. It is highly unlikely that every patient needs or uses the same brand and type of wheelchair or walker. Moreover, the government may be paying twice
Managed Care Plans or HMO's
is simply a type of health insurance designed to control the rising cost of
medical care without sacrificing the quality of the health care consumers
receive. It was developed to lower the out-of-pocket costs for consumer. Critics
contend that it has lowered costs by limiting access to health care and by
cutting the quality of care consumers receive. It is popular with employers
looking to cut costs associated with the traditional indemnity type of health
generally falls into three types or categories, but it can be misleading to
generalize. Exceptions abound and it is important to study each individual plan
offered. That said, the following discussion is a good starting point.
The first, health maintenance organizations, commonly called HMOs, are networks of health care providers. They come from a wide variety of
The second type is the managed indemnity type. In this type of plan, the consumer can see any medical provider. But, the consumer needs to get
And, third is the preferred provider organization or PPO. This plan is a hybrid of the HMO and traditional indemnity type of insurance. It relies on a network of providers, but members may use any provider for care. Financial incentives, like better benefits and lower co-payments, encourage the use of inside the network providers.
Decisions by managed care plans denying health services or health care can be appealed by the consumer .
? What does fraud look like In the managed care environment?
different in a managed care setting as compared to a fee for service environment
because most managed care plans operate in a capitated pre-payment environment
instead of a fee for services one. In other words, no claims are required to
secure payment. No bills or statements are sent to members for review. The fraud
usually occurs when a needed service is not provided. It is the underutilization
of a service that could be fraud
Failure to deliver services or under use of services. Some practitioners have
To limit or discourage services to plan members, some providers have limited
Some managed care plans have offered cash incentives to consumers to enroll in their plan.
The managed care plan itself has encouraged beneficiaries to leave the
Some physicians have accepted kickbacks in exchange for their referral to non- plan specialists or hospitals.
Signs of Fraud In Managed Care Plans.
Member complaints of waiting several days or weeks to see providers.
Members who have received money or other inducements for enrolling of leaving
Allegations of services not received. Medical supplies or equipment received, but not as ordered. Continued billing to the plan when the member no longer needs equipment.
Member complaints of misrepresentations about the cost of participating in a
hospitals have been undergoing a series of changes. Many have
? Why does the fraud occur?
patients are often not aware of all of the services they are receiving.
Stories of Health Care Fraud in Hospital Settings
hospitals in Philadelphia made it their practice to bill resident's time as
a supervising physician's time. This practice is not permitted by Medicare
and Medicaid regulations. The hospitals were sued to stop the practice and
the federal programs were reimbursed millions of dollars for the error.
A drug and
alcohol rehabilitation facility discharged their patients on paper, but not
in fact. The hospital received the reimbursement for the inpatient stay and
then also billed for outpatient services. Since the patients never left the
hospital, the facility should
Some Common Fraud Schemes
Misrepresentation of patient's condition on the claim form in order to increase the payment.
Misrepresentation of discharge date in order to obtain inpatient and outpatient reimbursement
Billing multiple view x-rays when only one view was taken.
Some patients have been held in observation status for 3 or 4 days, rather than admitted as a hospital patient. Hospital observation services are usually reimbursed at a higher rate than the hospital would receive for an inpatient.
Mental Health Services
health services can be delivered to consumers in several settings. For
example, a consumer may experience a mental health crisis and receive
treatment in a hospital. She or he may then move on to a nursing home or
other facility with a less intensive
Hospitalization Programs (PHP's) are designed to keep patients with severe
? Why Mental Health Services?
Patients must trust their therapist or counselor .
Some patients may be incapable of reviewing and understanding the MSNs or the MSN's to monitor discrepancies in services provided and services billed for.
Because to some individuals a stigma may attach to the person receiving
Stories of Health Care Fraud in Mental Health Services
insurance companies lost millions of dollars in the 1980's when it seemed an
epidemic of clinical depression had targeted the nation's teenagers, the
overweight and the substance abusers. Doctors and private nursing homes
diagnosed depression to assure reimbursement whether it fit the symptoms or
not. Because the diagnosis
example of fraud or abuse is to bill for psychotherapy to treat an advanced
stage of Alzheimer's resident in a nursing home. Psychotherapy is an
intensive treatment requiring the patient to interact with the therapist.
Advance stage Alzheimer patients simply do not have the cognitive abilities
to participate in this kind of treatment.
The Fraud Schemes
Routine up coding of psychotherapy sessions by the mental health provider. There are several variations that occur:
A psychiatrist conducts group sessions in a nursing or residential facility but bills for individual therapy.
What to watch for in Mental Health Settings
Group therapy sessions where recreational activities are being provided.
The presence of mental health providers with patients who are non-communicative or cannot benefit from psychotherapy (patients in coma, patients in the late stages of Alzheimer's or other similar illness.)
Clinical Laboratory Services
laboratories provide invaluable data to doctors by testing specimens and
providing results to aid in diagnosis. Consumers may not come into contact with
? Why does the fraud occur?
labs are in the almost unique position of billing without oversight because of
several factors. The first is that beneficiaries or consumers have not received
Explanation of Benefit forms, or Medical Summary Notices or any explanation of
fees. Second, Medicare pays 100% of lab fees. Third, physicians do not see the
lab bill submitted to Medicare. And finally, for most lab tests, Medicare has
not required labs to submit diagnosis or symptom information to support the need
for the tests.
A Story of Fraud in the Clinical Lab Setting
example of this kind of health care fraud occurred in February 1997. SmithKline
Beecham PLC, a Philadelphia based multinational drug company agreed to pay a
total of $325 million to the federal government to settle claims it's clinical
laboratory conducted unnecessary blood tests and cost the Medicare and Medicaid
programs millions of dollars. This fine is the highest to date. The fraud
included deliberately overcharging for certain blood tests. These unnecessary
blood tests were not ordered by doctors and in many instances the blood tests
were billed for separately, instead of as a package. This practice is called
unbundling. It costs more, and is specifically prohibited by Medicare and
Medicaid regulations. The cost on any single patient's bill was small, yet
because of the volume of business, the overall cost to Medicare and Medicaid was
Some Common Schemes
Labs have billed for services not ordered or provided. In a single 60-day period, one lab submitted 717 claims for 416 beneficiaries of Medicare, and received over $330,000. Many of the beneficiaries were dead and one "referring" physician had been dead for two years. In a random survey, nearly a third of the beneficiaries had never received any services from the lab or did not know the referring physician identified on their claims.
Labs have added tests not ordered by the physician and billed the added tests separately to Medicare.
Labs market their tests as panels or groups to physicians, but 'split out' , certain tests and bill them separately to Medicare. For example, a
"Rolling labs" have gone to senior centers, shopping malls, etc. and
Signs of Fraud In Clinical Laboratories
"Free" services billed to Medicare or other insurers.
Inconsistencies on MSNs or MSNs regarding services billed and services
Dates of service on laboratory claims should generally be within 7 to 10
Ambulances are used to transport patients, nursing home residents and the
homebound in many different circumstances. Medicare and Medicaid cover the
cost only if
? Why Does the Fraud Occur?
Beneficiaries, hospital discharge planners, nursing home staff and others do
not understand Medicare coverage of this benefit.
A Story of Health Care Fraud In Ambulance Services
transport were provided to ambulatory dialysis patients to and from the
Some Common Fraud Schemes
Billing for advanced life support services (ALS) when basic life support
Billing for more miles than traveled for transport. Air ambulance services have reported their mileage in ground miles instead of nautical miles.
Falsification of documentation to substantiate the need for a transport from a hospital back to the patient's home. Medicare will only cover transport from hospital to home if the patient could not travel by any other means, such as car, taxi, or cabulance.
Signs of Fraud in Ambulance
Ambulatory patients requiring regular medical services, such as renal dialysis, being transported by ambulance.
Discrepancies between services provided and those billed for on the MSNs.
|The above information is contained in the Senior Medicare Patrol Volunteer Training Manual which was written by CARIE, in Philadelphia.|