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5 Surprising Places Medicare Fraudsters Lurk

Health insurance scams can show up when — and where — you least suspect them

spinner image Woman receiving unwanted telephone call At Home
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A sad fact of life: Medicare, a vital insurance program for older Americans, hemorrhages billions of dollars every year due to fraud. The criminals to blame hurt not only the more than 60 million beneficiaries. The thievery affects every taxpayer whose dollars help pay for Medicare.

That's why older Americans should know that these crooks lurk not only in doctors’ offices, hospitals and clinics. Allan Medina, who leads the Justice Department's Health Care Fraud Unit, tells AARP that Medicare fraudsters prowl in places that one might not expect.

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Lying for money

Medicare fraud involves lying for money, he says, and it's happening in “epic proportions.” Medina, 39, spoke to AARP on Tuesday — World Elder Abuse Awareness Day — and singled out five surprising places fraudsters operate.

1. At health expos. Attendees have been approached for a “free” genetic test for cancer, filled out a questionnaire, given up a Medicare number and had a cheek swabbed for DNA. Except the test isn't free; Medicare pays for it. “We're talking close to $6,000,” says Medina, who says the bad actors are marketers who often pay kickbacks to corrupt doctors to obtain signed medical orders. Even worse, the fraudsters may order more tests — allergy panels, for example — and send on the bill to Medicare.

spinner image Allan Medina
Justice Department

2. On the phone. Sometimes the same scheme plays out in an unsolicited phone call. Telemarketers have contacted Medicare beneficiaries and insisted the recipients of the call need to undergo an expensive test. “If you want to keep your benefits, you must take this test,” they've been warned. That's a bald-faced lie.

3. On a telehealth visit. Executives of telehealth companies have paid clinicians to order unnecessary durable medical equipment, genetic tests, other diagnostic tests or pain medications, Justice Department officials say. The clinician may have a brief phone call with a patient — or no contact whatsoever. Last July, a telehealth company owner in South Florida pleaded guilty to generating and selling doctors’ orders used to defraud Medicare of more than $21 million.

4. On a street corner. Bad actors known as patient recruiters or marketers “hit the streets, they go to bus stops, they go senior homes — things of that nature,” Medina says. As an opening pitch, they might tell an older American, ‘Hey, you look like your knee hurts. If you give me your Medicare number, I'll get you a massage.'"

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The bad actor can sell a patient's Medicare information to a shady durable medical equipment firm or a lab. Then, sham invoices are credited and Medicare is saddled with the bill.

5. In your home. Home health consists of part-time, medically necessary services ordered by a physician and covered by Medicare. The services could be skilled-care nursing or physical therapy, for example. Bad actors lie when they complete patient assessments and exaggerate what help they need. “The sicker someone is, the more you get paid,” is the fraudster's mindset, Medina says.

Katherine Skiba covers scams and fraud for AARP. Previously she was a reporter with the Chicago Tribune, U.S. News & World Report, and the Milwaukee Journal Sentinel. She was a recipient of Harvard University's Nieman Fellowship and is the author of the book, Sister in the Band of Brothers: Embedded with the 101st Airborne in Iraq.

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