Watch Out for a New Update to Medicare’s Fraud Rules

It’s an unfortunate fact that anyone can become the victim of fraud, even those who think they’re being as careful as possible. It’s also unfortunate that scammers will typically target older adults who have Medicare, because they believe that it will be easier to confuse and mislead older adults, especially ones who are new to Medicare. The Social Security Administration is now considering changing the way it handles the effects of fraud and theft for Medicare beneficiaries, specifically for IRMAA calculations. Find out just how this will impact you in the future. 

Medicare & IRMAA

coins lined up next to each other going higher each time with a red arrow above them going upward
The higher your income, the more you will have to pay in Medicare Part B premiums.

If you’re a Medicare beneficiary, you know that you have to pay a 20% coinsurance and a monthly premium for Medicare Part B; if you have a higher income, though, you will have to pay more based on how much you make. This additional amount you might have to pay is known as the Medicare Income-Related Monthly Adjustment Amount, or IRMAA.

Medicare beneficiaries must pay a premium for Medicare Part B that covers doctors’ services and for Medicare Part D that covers prescription drugs; these premiums cover about 25% of the program costs for Part B and Part D, and the government pays the other 75%. IRMAA is divided into five income brackets: higher-income beneficiaries pay 35%, 50%, 65%, 80%, or 85% of  program costs instead of 25%. For example, if your adjusted gross income (AGI) is $91,000 or more, you can expect to pay almost $60 more each month on Medicare Part B premiums; the same goes if you are married filing jointly making an income of $182,000 or more. Your 2020 income will determine your IRMAA in 2022

Life-Changing Events

If you are in an income bracket that requires you to pay an IRMAA, but you experience a life-changing event, you can ask the Social Security Administration to change your monthly premium adjustments. These life-changing events include:

  • Marriage
  • Divorce
  • Death of a spouse
  • Loss of pension income
  • Employer settlement payment
  • Loss of income- producing property, meaning you had a loss of property in a disaster area or due to arson, destruction of livestock or crops due to natural disaster or disease, or loss of investment property due to fraud or theft
  • Work reduction
  • Work stoppage

You can file an appeal by filling out form SSA-44 to show that, although your income was higher two years ago, you had a reduction in income now due to one of the above life-changing events.

The IRMAA Fraud Project

The Social Security Administration is now looking specifically at one of those life-changing events – fraud – with a view to possibly changing the way it handles the effects of fraud and theft on people who are using income-linked Medicare features. Currently, high-income fraud victims can note the impact of the fraud when asking regulators to cut their Medicare Part B bills, but the IRMAA fraud project could help make victims of more types of fraud eligible for Medicare Part B cost cuts.illustration of an ear with a hand next to it

The Social Security Administration is open to hearing from the public about how it should update consideration of the impact of fraud in connection with IRMAA calculations:

“We are seeking information from the public on the type of information to consider when contemplating potential changes to our regulations concerning life-changing events resulting from fraud or criminal theft to respond to new types of fraud,” officials say in the project abstract. “This information will help us provide more effective relief to adversely impacted beneficiaries.”

It is important to take part in notifying the Social Security Administration because otherwise, you could end up being denied an exemption on a life-changing event due to fraud or theft. The project will influence how federal, state, and commercial organizations set the rules for how they respond to consumers who say they are facing hardship due to fraud or theft.

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How To Report Medicare Fraud Or Abuse

Medicare is a federal health insurance program for people who are 65 and older. Medicare works within a network of doctors to provide beneficiaries, like yourself, with proper care. However, sometimes people will abuse their power and take advantage of the program. When this happens, it is considered Medicare fraud, or Medicare abuse. This is a serious issue that needs to be reported. 

womans hands on a calculator in front of an open laptop
Billing mistakes can happen with Medicare sometimes. 

Billing Errors

Everyone has been there, opening up a bill only to notice an extra charge, or a couple of charges that are unidentifiable. Unfortunately, at times these billing mistakes can happen with Medicare.

Accidents happen. Just be sure to keep an eye on your bills and contact Medicare, or your doctor if you see a charge you do not recognize. They can explain why the bill has extra charges, or realize it was a mistake and correct it. These kinds of mistakes are not considered fraud or abuse.

Fraud

Medicare fraud does not just affect you, it affects taxpayers financially, and affects the availability of services for Medicare beneficiaries. An act is considered fraud when it is done intentionally, or abusing the Medicare system for personal gain. For example, it is one thing if your doctor bills you accidentally for services not provided, but for it to happen multiple times is a clear case of Medicare fraud. 

Medicare fraud is when a doctor or health care provider sends a bill for services or products that were not medically necessary, more than once. If it is a pattern, or recurring issue, then it is fraudulent and considered Medicare Abuse. Some things a doctor might say or do that you should report are:

cartoon of a person sitting in front of a laptop with "fraud alert" on the screen
Beware when a doctor states the following:
  • Saying “the more tests performed, then the less you pay out of pocket.”
  • Offering you a gift to get you to use their services
  • Waives a copayment 
  • Saying the copayment is higher on a no-coplay plan
  • Telling you they know how to get Medicare to pay for something that isn’t covered on your plan. (Tells you that you can receive coverage on a non-covered service).
  • Claiming that Medicare endorses their products or services

Reporting It

Pay attention to your bill and look through your Medicare Summary Notice often. This will give you a clear understanding as to what is covered through your insurance, and how much things are. If you are overcharged for services, or products, then you are a victim of Medicare Abuse. When you report fraud or abuse, your name will be kept anonymous, so your doctor will not know it was you. Be

cause odds are if he or she is doing it with you, then they are doing it with others.

caucasian hands holding a cell phone

Report Medicare fraud or abuse by:

  • Call the Medicare fraud tip line at 1-800-HHS-TIPS (1-800-447-8477). The TTY number is 1-800-377-4950.
  • Email: You can also send up to 10 pages describing the incident to HHSTips@oig.hhs.gov.
  • Fax your report (up to 10 pages) to 1-800-223-8164.
  • Mail the report (up to 10 pages) to the Office of the Inspector General HHS Tips Hotline, P.O. Box 23489, Washington, DC 20026-3489.

As stated, billing errors can occur, but if it keeps happening, then fraudulent activity is happening. Make sure to always stay on top of your bills, and know what is covered and what is not.

Group Health Plans Accused of Medicare Fraud

If you live in the Seattle area, you might have seen that Group Health Cooperative (GHC) is under investigation. The nonprofit health insurance company allegedly took advantage of Medicare’s system, stealing millions of dollars to recover from earlier financial losses.

A former employee noticed the company was embellishing patient stories to claim more funds. This extended to even billing Medicare for conditions that were not real. 

This all started in 2012 but has remained under lock and key in court until this year. While several employees came forward, the investigation is still in the “ongoing” phase.

Situations like these aren’t isolated.

Almost 20 major cases under Kaiser Health News saw companies skimming off the top of government funds. Medicare Advantage is the easiest tool to do so. All the companies have to do is lie about their patient’s cases, and the money pours in.

face of an insurance building with people walking alongside of it
Make sure to double-check your information when you give it to your insurance company.

How It Happened

One employee, Teresa Ross, worked at GHC and noticed the company’s management making some bad choices. Because of these, Group Health saw a drop in operating income by $60 million.

To recover from this, the insurer allegedly took advantage of Medicare’s billing formula. Under Medicare, they give a patient a “risk score.” The higher the risk score, the sicker the patient, and higher-risk patients receive more funds. 

GHC hired another company, DxID, to assist with medical charts. With their help, GHC gained $12 million in new claims, and DxID received $1.5 million that year for their assistance.

Ross, with a doctor’s help, reviewed cases GHC oversaw. In the medical coding, she found errors that directly contradicted each other. One case stated the patient had a great disposition, but on further searching, this patient was also billed with having major depression. Clinical depression easily raises a patient’s risk score under Medicare, and this is only one of $35 million in new claims that GHC inflated.

Overestimating these scores, the company received enough funds from Medicare to climb out of their financial hole, but at the cost of government funds allocated to help a sick country–and directly from taxpayers’ pockets. The estimated gross damages climbed up into billions of dollars in just the past few years.

What Happens Next

The Justice Department is investigating this whistleblower case. Like other insurance cases, these last for years in order to provide the most accurate evidence to support such allegations. If Ross succeeds in her case, she will share in reparations the company must make for their actions.

meeting room to discuss medicare fraud
Investigations take a while for a reason. People just like to make sure justice will be served without any doubt.

However, the company’s official stance is: “We believe the doing policies being challenged here were lawful and proper and all parties paid appropriately.” GHC’s defense is that Ross found an “honest mistake” and made a bigger conflict out of it than was necessary.

Two conflicting defenses for one stance? For now, we wait for the Justice Department.

 

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