Eye on the Issue: Medicare Fraud

Medicare fraud is a serious problem, whether it is phony billing schemes, identity theft or telemarketers that sell products beneficiaries don’t need. Today, law-enforcement authorities estimate that Medicare fraud, waste and abuse cost U.S. taxpayers billions of dollars, and that doesn’t include the fraud that occurs throughout the rest of the health care system. Estimates of overall health care spending lost to fraud range from 3 percent to 10 percent.

Some of the most common tactics used to commit Medicare fraud include: 

• False claims: Billing for health care services that are unnecessary or were never delivered, such as hospital or doctors’ services, prescription medications, or medical supplies such as wheelchairs or oxygen.
• Identity theft: Using another person’s Medicare card to obtain medical care.
• Kickbacks: Paying another provider for a patient referral or paying a patient to seek Medicare services for phantom symptoms.
• Scams: Deceiving Medicare patients by posing as a Medicare representative authorized to sell them medical supplies or to suggest appointments or treatments.

AARP is calling on Congress to continue to strengthen Medicare’s ability to crack down on fraud and abuse. Specifically, Congress should increase legal penalties — both fines and jail time — on scam artists for fraud; give investigators and prosecutors more tools to catch and punish criminals; and shine a spotlight on fraud committed against Medicare beneficiaries and taxpayers. Taking these steps will help protect seniors from harm, strengthen Medicare and help reduce the federal deficit by lowering skyrocketing health care costs.