Definitions

Fraud:

The intentional deception or misrepresentation of which an individual knows to be false or does not believe to be true, and makes knowing that the deception could result in some unauthorized benefit to himself/herself or some other person.

The most frequent kind of fraud arises from a false statement or misrepresentation that is material to entitlement -or payment under the Medicare program.

Abuse:

Incidents or practices of providers of which are inconsistent with accepted sound medical, business, or fiscal practices. These practices may directly or indirectly, result in unnecessary costs to the program, improper payment, or payment for services that fail to meet professionally recognized standards of care, or that are medically unnecessary.

Abuse involves payment for items or services when there is no legal entitlement to that payment and the provider has not knowingly intentionally misrepresented the facts to obtain payment.

Some Examples of Fraud

• Billing for services or supplies that were not provided
• Altering claim forms to obtain a higher payment amount or billing for a different level of service than that actually provided to the patient
• Soliciting, offering or receiving a kickback, bribe or rebate (for example, paying for a referral of patients)
• Provider completing Certificates of Medical Necessity (CMN) for patients not professionally known by the provider.
• Suppliers completing a CMN for the physician
• Using another person's Medicare card to obtain medical care
• Billing for work already reimbursed by another insurance provider, or billing for work the provider cannot document as having provided

Possible Outcomes of Fraud

• If determined to be billing error, processing error and/or other misunderstanding, appropriate action is taken
• If the review shows claim was paid properly, the beneficiary is informed of the findings
• If the review shows a billing or processing error, the claim is adjusted to reflect the correct information
• Referral to the Office of Inspector General (OIG) (Medicare contractor develops case prior to referral)
• Criminal and/or civil prosecution o Sanctions (e.g., termination of participation agreement)
• Civil money penalties (Section 1128A of the Social Security Act allows penalties up to $2,000 for each false or improper item claimed plus up to twice the amount falsely claimed)
• Exclusion from the Medicare program
• OIG may refer case on to other law enforcement agencies, such as the FBI

Some Examples of Abuse

• Excessive charges for services or supplies
• Claims for services that are not medically necessary
• Breach of the Medicare participation or assignment agreements
• Improper billing practices
• Exceeding the limiting charge
• Billing Medicare at a higher fee schedule rate than for non-Medicare patients
• Submitting bills to Medicare where Medicare is not the beneficiary's primary insurer

Possible Outcomes of Abuse

• Recoup amounts overpaid
• Education and/or warnings of provider
• Referral to the Medical Review unit
• Post payment audits or review of claims
• Prepayment review of certain practices; provider required to submit documentation prior to claim determination
• Referral to Office of Inspector General if all else fails and abuse continues
• Possible sanctions or exclusion from the Medicare program
• Possible Civil Money Penalties (CMPs) up to $10,000 for repeated limiting charge violations