Medicare and Medicaid Fraud Prevention Saved Taxpayers $42 Billion from 2012-14

Medicare and Medicaid fraud is rampant, costing U.S. taxpayers billions of dollars a year. In an effort to combat fraudulent billing practices, CMS (the Centers for Medicare and Medicaid Services) has instituted efforts to prevent medical billing fraud, including making certain that Medicare and Medicaid health care providers are properly screened; using predictive analytics to prevent fraud, waste, and abuse; and coordinating efforts with other federal partners.

From October 1, 2012 through September 30, 2014, CMS saved American taxpayers $12.40 for every dollar CMS spent on fraud prevention, saving taxpayers more than $42 Billion in that two-year period. According to CMS, these preventative measures are more effective than prior "pay-and-chase" efforts of recovering payments after they had already been made.

You Can Help Prevent Medicare and Medicaid Fraud

Despite the success of its fraud prevention measures, CMS still needs assistance from Medicare contractors, state Medicaid agencies, law enforcement, and people like you. Ordinary people can help prevent medical billing fraud by using the False Claims Act to expose fraudulent medical billing practices.

Medical billing fraud usually takes one of three forms:

  • Phantom billing, in which medical providers bill Medicare or Medicaid for unnecessary procedures or procedures that were never performed; or
  • Inflated procedure codes, where a provider bills Medicare or Medicaid for a more expensive service but actually performs a less expensive one.

Under the False Claims Act, whistle-blowers with specific information about how Medicare or Medicaid is being defrauded are entitled to bring claims on behalf of the government and can share a percentage of the recovery, called a "bounty."

Individuals who can provide documentation that a facility is billing for unnecessary care, or not providing care for which it bills Medicare and Medicaid, can act as an agent of the government, called a "Relator," by filing a claim under the False Claims Act with the assistance of a False Claims Act lawyer. In exchange, those medical professionals get the satisfaction of knowing that they helped improve the quality of care received by Medicare and Medicaid patients. They are also entitled to share in a percentage of the recovery, called a "bounty" which can range from 15% to 30% of the total amount recovered.

Fraud prevention doesn't just save taxpayers money. It also helps ensure that patients receive the best care possible. By eliminating bills for unnecessary services, or services that were never provided, medical providers are able to allocate their resources more efficiently, focusing on providing the right kind of care for the people who need it most.

Employers who fire a whistle-blower may be liable for double damages in a lawsuit, and may need to pay whistle-blowers double back-pay. In fact, in 2013 the Department of Health and Human Services (DHHS) announced that the cap for Medicare fraud whistle-blowers recovery would be increased to almost $10 million. Former HHS Secretary Kathleen Sebelius stated that the proposed change is a "signal to Medicare beneficiaries and caregivers that... they are critical partners in helping protect taxpayer dollars."

Whistle-blower lawsuits are complex. Learn more about different types of claims that can be filed under the False Claims Act, or contact an experienced whistle-blower protection attorney for answers to your questions.