Why Medicare is Overbilled

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A Medicare health plan is designed to cover American citizens over age 65, certain disabled citizens of any age and citizens who suffer from End-Stage Renal Disease. This type of insurance helps participants cover the expenses of medically necessary exams, procedures, surgeries and healthcare supplies according to the type of Medicare coverage for which the participant has opted.

In recent years, the media has uncovered horror stories of different types of abuse to the Medicare system. Abusers of the system can be intentional or not, but the stories that really catch the public’s attention are ones that tell of healthcare personnel intentionally overbilling Medicare.

Medicare abuse has been a long-standing issue that takes funds from a federal health insurance system put in place for certain groups of Americans. Ideas to prevent this type of fraud have been tossed around in desperate attempts to bring this injustice to a halt. New laws have been passed, positions have been created, but minimal progress is being seen. Even though fiscal 2013 showed a spike in the number of providers excluded from federal health programs, the number of settled cases has remained consistent for the past few years.

This discouraging statistic means that, regardless of any new or ongoing efforts, current prevention tactics are no more effective than they have been in recent history. Many barriers lie between where we are and where we should be in the fight against Medicare abuse. While we might not be able to pinpoint every single reason Medicare is overbilled or every shortcoming in the system, light can be shed on many of the causes of this rampant problem.



To Speak or Not to Speak?

One major reason Medicare continues to be so vastly overbilled is because of healthcare workers’ fear of retaliation. Falsifying claim forms, ordering unnecessary procedures, adjusting the actual cost of services, billing for services or supplies that were not provided, and even billing for appointments that were cancelled as if they had been carried out, are just some of the many dishonest actions health employees can witness on the job. It’s unlikely that they condone such practices; however, most of them won’t blow the whistle for fear of dire consequences like job loss or other retaliation.


Case Study

Two doctors who ran a mental health facility billed Medicare for an enormous sum of money. These physicians had been billing for therapy that was never performed. Medicare paid these doctors for the intensive outpatient treatment they were supposed to be administering. Over a period of five years, these doctors managed to bill Medicare for $97 million dollars before being brought up on charges.

Did any of the doctors’ staff know about what was going on? No one can say for sure. However, it isn’t uncommon for workers to keep dishonest practices at work quiet for fear of losing a job. This is a classic scenario that is not limited only to Medicare abuse. It demonstrates the ways widespread fear of job loss and retaliation keep some employees paralyzed into silence. If any employees were aware of the two doctors’ practices, it’s likely they were afraid to acknowledge the situation. So in their fear, they turned a blind eye while American taxpayers unknowingly pitched in and collectively gave nearly a hundred million dollars to these two doctors.  



Penalties for Abusive Practices

Another reason Medicare is being overbilled is that, for the larger facilities, the penalties haven’t been strict enough. While some smaller companies might have no choice but to close their doors due to a Medicare fraud penalty, some of the larger, for-profit hospitals barely blink at the consequences.

Medicare reportedly reimburses more on inpatient services than outpatient services of the same capacity, so a Florida-based hospital decided to admit Medicare patients who came in through the emergency room, whether it was necessary or not. Some of the doctors and other staff who took issue with it and refused to admit patients unnecessarily were punished and even fired. At the time that this issue was brought to light, the hospital was in the process of being bought out.

The most outrageous part: it didn’t seem to shake any of the management. It turned out that, because it was a for-profit facility with previous quarter sales upwards of $1.4 billion, anything less than a $500 million penalty would be equivalent to a slap on the wrist.


The Problem of Under-Staffing 

Short staffing is yet another problem causing Medicare to be overbilled continuously.  Many of the offending facilities get to remain under the radar for a while – even after complaints have been made – largely due to staff shortages at the Department of Health and Human Services.  Before the middle of last year, over 1,200 complaints sat untouched, because they just didn’t have the staff to handle all of them. Imagine how many of those complaints were actually valid and how many of those providers continue submitting fraudulent claims simply because no one has been able to review the complaints against them. With offices cutting jobs and running a skeleton crew, the backup can only get worse.

Concerns have been expressed not only from government officials, but also from the Office of Inspector General regarding the common feeling that very few proactive efforts have successful outcomes. In fact, the majority of the referrals to law enforcement were not due to diligent oversight; they were mostly from concerned patients and brave whistleblowers.



The White Collar Illegal Drug Industry

Facility care isn’t where it ends; prescription claims make up a large portion of the Medicare fraud reported. It is feared that Medicare officials are not taking care to track the validity of prescriptions or investigating the ones that look suspicious. A study cited over 700 doctors who wrote highly questionable prescriptions for elderly and disabled patients. These included high quantities and multiple controlled substances.

Furthermore, prescriptions are being written for unapproved uses, and Medicare is being billed for them. Due to poor execution of proactive preventative steps, millions of dollars in prescription drugs are prescribed by professionals who have been banned from the program are paid for by Medicare every year. Even worse, prescriptions that were written by non-verified “providers” are being billed to Medicare.

While charges are being filed against practitioners and other white-collar healthcare workers, still more are catching on to how easy it is to scam the system. One would think that by watching other practitioners lose their licenses and close their practices, people would learn to stop stealing from the system. Concerned American citizens who have paid into the Medicare system their entire adult lives point fingers in every direction as to who is making this all possible, and understandably so. As we attempt to find the source of the problem in the system, we must remember that the true blame lies on the ones who are intentionally stealing from the program.


Getting Rich at the Cost of Human Lives

These providers don’t just steal from taxpayers; they steal from every potential American who will need to use the Medicare system one day. It really is only about the money for those who purposely scam the system; however, it goes far beyond that for the patient, as it can truly affect their lives in a negative way. An oncologist in Detroit was indicted after unnecessarily treating patients with chemotherapy and other expensive and painful treatments. One patient was told she had cancer and, after undergoing a bone marrow biopsy and chemotherapy and having her life and family disrupted, found out the doctor had simply been destroying her body so he could line his pockets with taxpayers’ money.

This patient never considered that her doctor would be dishonest, so she didn’t bother questioning him. We’re conditioned early in life to take a doctor’s word as truth. Unfortunately, sometimes there is no way to know about the fraud until long after the damage has been done. With the countless providers across all sectors in the field of medicine, a system doesn’t exist that stands over everyone to ensure they are doing the right thing.



Don’t Just Take the Doc’s Word for It

Patients can take a few of their own steps to help ensure the provider isn’t using them for abusive Medicare practices. One way of doing this is by thoroughly checking all statements to verify the treatments are correct and that there aren’t any services listed that were not actually received. Medical billing errors occur daily, so just because something seems off doesn’t mean your provider is being dishonest.

The vast majority of providers do strive to operate with the highest integrity. However, it is important to protect yourself by asking questions and carefully examining your medical bill statements for errors. If a doctor is ordering tests and treatments, it is wise to seek a second opinion from an unaffiliated doctor – not just for the sake of the Medicare program, but for your overall health and peace of mind.

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One response to “Why Medicare is Overbilled”

  1. fatima says:

    I want to ask that a hospital charged me for something i didn’t receive and they gave me a bill of 11,584 dollars for just a consultation.can you tell me where can i complaint against them?