Medicare is the largest payer for medical services in the United States. Over 1.1 billion claims from healthcare providers resulted in payments of over $454 billion. Medi-Cal pays out approximately $120 billion annually for California residents who rely on it.
With numerous claims being processed, there are ample opportunities for healthcare providers to commit fraud; however, the penalties are severe for those who are caught.
Common types of Medicare and Medi-Cal fraud
Medicare and Medi-Cal fraud occurs when a healthcare provider uses deceptive billing practices to gain unauthorized funds from government programs. These fraudulent activities drain public funds of billions of dollars and undermine the integrity of healthcare systems. The most common types of fraud include:
- Billing for services not rendered: Claims are submitted for procedures, tests or treatments that were never performed.
- Upcoding: Providers charge for more expensive procedures than the ones provided.
- Kickbacks and referral schemes: Accepting payments, gifts and other incentives from specialists, pharmaceutical companies and medical products manufacturers in exchange for patient referrals.
- Unbundling: Certain procedures that involve multiple services are billed as a single package. Unbundling involves separating these services into individual line items to maximize reimbursement.
- Falsifying patient diagnoses: Patient conditions are altered or exaggerated to justify unnecessary tests and procedures.
The federal and state governments take healthcare fraud seriously. Legal consequences include:
- Financial penalties: Fines can range from thousands to millions of dollars. The federal False Claims Act (FCA) allows authorities to impose penalties of up to three times the government’s losses, plus additional fines for each claim.
- Imprisonment: A conviction of either Medicare or Medi-Cal fraud can result in a prison sentence. For example, the maximum sentence for violating the FCA is five years.
- Exclusion from programs: Providers can be excluded from participating in Medicare, Medi-Cal and other government programs, which means they lose access to a significant portion of their patient base.
Healthcare providers with the best intentions can sometimes unknowingly commit errors due to the complexity of billing laws. They shouldn’t try to resolve the issue on their own. There is too much at stake. Working with a legal professional can help ensure the best outcome of a healthcare fraud claim.
