Medicare Fraud History

The History, Incidence, Costs and Institutional Remedies

Medicare fraud and abuse is a serious problem. While the majority of healthcare providers appear to be honest and well-intentioned, there is still a marginal amount of provider’s intent on abusing the system. This sort of abuse is detrimental, not only does it cost taxpayers billions of dollars but it put the beneficiaries’ health and welfare at risk and puts an increased strain on Federal and state budgets. The effect is then realized and the risks are magnified by the growing number of people served by Medicare. Thus the need for prevention, in this paper we will discuss the history, incidence, costs and institutional remedies that where taken in previous incidences of Medicare fraud

The basic design of the Medicare program was modeled on the private insurance system in place in the 1960s. With the program being established during an era when there was an insurmountable amount of financial worry, this group of people sought to explore options to reduce cost as they feared if hospitalized by an illness they would be subject to huge hospital bills and inadequate care. As a result of this, President Lyndon B. Johnson made Medicare law by signing H.R. 6675 in Independence, Missouri on July 30, 1965. Former President Truman was issued the very first Medicare card during the ceremony. In 1965, the budget for Medicare was around $10 billion and 19 million individuals signed up for Medicare during its first year. In 1966, Medicare's coverage took effect, as Americans age 65 and older were enrolled in Part A and millions of other seniors signed up for Part B (MRC,

Although there are a number of incidence of Medicare fraud showing up almost daily. The most common incidence appears to involve Phantom billing, False Patient Billing and Upcoding or Upbilling. In phantom billing scams, the provider bills Medicare for procedures that aren’t necessary or even performed. Durable medical equipment falls under this category. In false billing scams, which are usually found in areas which contain a large number of senior citizens, the patient himself may be duplicitous. In these scenarios, a Medicare-eligible patient may provide his Medicare number and allow a provider to bill Medicare for tests and procedure either unneeded or unfulfilled. In Upcoding and upbilling. Providers typically seek to receive additional and unwarranted and illegal by using a code that may not be merited but results in the need for further services and tests, and, therefore higher reimbursements. These scams and others have resulting in the government using more money than we have. Fortunately as these providers attempt to invent new ways to scam, the government is also coming up with ways to mitigate this