According to the Office of the Inspector General at the Department of Health and Human Services, Medicare loses $60 billion annually to fraud, scams, waste, and abuse.
Scammers are counting on your confusion about Medicare’s complex rules so you go along with their fraudulent schemes.
The lost money is bad enough. But some of those Medicare scams can harm you personally. Read on for important tips so that you won’t fall for Medicare scams and contribute to this problem.
Table of contents
The genetic testing scam — covered by Medicare
If you had a family history of breast cancer, heart disease or another serious condition and someone offered you a free genetic test to find out if you carry a dangerous gene, wouldn’t you be tempted to get the test? Especially if that person told you it’s free because Medicare will pay for it?
The pitch is hard to resist. All they need is your Medicare number.
However, Medicare does not cover routine genetic screening. Medicare only pays for genetic tests if your doctor orders them to help treat you for a specific problem or manage your condition. But scammers bet that most Medicare beneficiaries don’t realize that and will fall for the pitch.
You might see free genetic tests offered at a senior fair or a community wellness event. There might be a table at a farmer’s market or at a shopping center. They make it easy to sign up. You just fill out a form and let them take a picture of your Medicare card. Or, the pitch might come as a phone call from someone claiming they were referred by your doctor, who asked them to run the genetic test to assess your risk factors. All the caller needs is your Medicare number.
That can turn into big money for crooks. Last year a Florida man pled guilty to his role in a $73 million conspiracy to defraud Medicare by billing for unnecessary genetic testing.
That was just one case.
Your mental warning bells should go off if someone offers you something for free and all they need is your Medicare number. Crooks will use your information to submit bills to Medicare with fraudulent claims for treatment supposedly provided to you.
How Medicare fraud can hurt you personally
In addition to the lost money, some of those scams have a direct and harmful impact on individuals. Consider the case of a California woman who only found out that she was a victim of Medicare fraud when her pharmacy would not refill her prescription for a drug she needs to prevent the regrowth of her breast cancer.
According to Micki Nozaki, the California director of the Senior Medical Patrol, a national organization that works to reduce Medicare fraud, “The woman said that a nice lady came to her senior apartment building and offered many of the residents $50 cash and free Ensure shakes if they signed up for ‘a new Medicare program’ that helps seniors.”
Nozaki explained that what the “nice lady” actually did was sign that victim and others up to transfer their Medicare coverage to a hospice organization.
Hospice, under Medicare, is meant to be palliative care to ease the suffering for those with a terminal diagnosis and a prognosis of six months or less to live. That was not this victim’s situation. Hospice does not provide curative care. Medications or treatments that are meant to improve or stabilize a condition are generally not covered. That’s why the pharmacy couldn’t provide her breast cancer drug during the time it took to unwind the situation and get back her prior coverage.
The hospice benefit can be a financial gold mine for criminals. It can pay thousands of dollars a day to the provider of a patient’s care. In just one example, this past March, authorities arrested a physician and a marketer on federal charges stemming from a scheme that bilked Medicare out of more than $30 million for medically unnecessary hospice services.
A new Medicare card scam
Medicare fraud comes in many forms. A common telephone scam targets those who are new to Medicare. The caller says he’s from Medicare and wants to confirm that you have received your new card. Then he will tell you that you still need to activate the card. Of course, to do so, he needs the number on your card to confirm that it is correct.
The latest variant of that scam is when the caller says that, for some made-up reason, your Medicare card is no longer valid and that unless you exchange it for a new one, you will lose your medical coverage. If you hesitate, the caller increases the pressure by saying you could be fined up to $10,000 for not complying. That can be very scary.
Fact: Medicare won’t call you and ask for your card number
Please remember this: Medicare will not call you and ask you to give them your number. You don’t need to activate or reactivate your card. If you ever get a phone call like that, just hang up. Don’t engage. Hang up. It’s a scam.
Never call a scammer!
Other fraud schemes are more subtle. They don’t try to contact you. They try to make you want to contact them. One tool is television commercials on cable channels that target older viewers.
Perhaps you’ve seen variations of a television ad that shows an older person with back problems. Then he puts on a back brace and can now stand and walk pain-free. When his friend remarks how much better he seems, the man says it’s because of the back brace he just started using. And the best part, he says, is that he got it free because Medicare covered it. His friend then decides to order one also.
The commercial gives a toll-free number to call to see if you qualify for a free back brace or some other device such as a knee brace, cane or wheelchair. It urges you to call now to get your device free through Medicare.
When you call, someone collects your personal information, including your Medicare number and date of birth. Eventually, someone will send you a back brace, usually a cheap one you could have easily bought on your own at a hardware store. But the scammer will submit a bill to Medicare for a much more expensive, top-of-the-line model. Medicare will pay it because the scammer will claim to be a doctor who examined you and is ordering it for you as a medical necessity.
But that’s not all. The people who created the TV commercial will then sell your contact and personal information to other scammers who will bill Medicare for other medical services supposedly provided to you. They might also sell your information to others as part of a “sucker list.”
Medicare paid for a procedure she never had
In my role as a state-registered Medicare counselor in California, I met with a woman who found an unusual charge on her Medicare Summary Notice – the explanation of benefits Medicare sends you listing the claims that have been paid on your behalf. She noticed a claim from a doctor whose name she did not recognize with an office in a city she had never visited. The physician had billed Medicare more than $15,000 for a leg procedure that she never had.
This woman had no idea who this “doctor” was or how he had gotten her information. As I talked with her and asked questions, she did remember that she had seen a newspaper ad for a free knee brace and called the toll-free number to get one.
I turned her case over to the staff at the Senior Medicare Patrol, who investigated the fraud and then referred it to law enforcement.
How to protect yourself and the Medicare program from fraud
The Medicare scams I just described are currently the most active fraud schemes. There are many others, unfortunately. So how do you protect yourself and help protect the Medicare program?
The most important thing to remember is to guard your Medicare number.
- Beware of anyone who offers a free service or product but requests your Medicare number. If it’s free, they do not need a Medicare number. Ask yourself: “Why do they really want my Medicare number?”
- Don’t give out your Medicare number over the phone to anyone who calls you. Remember that Medicare will never call you and ask for your card number as part of that call. If you get a call like that, hang up.
- Don’t give your Medicare number to anyone other than your medical provider when you go in for an appointment. In most cases, your regular doctor should have your number in their computer system. So you don’t need to carry your Medicare card with you and shouldn’t unless you are seeing a new provider for the first time. Instead, keep the card in a safe place.
- Always review the Medicare Summary Notice explanation of benefits: You’ll get this notice after medical visits and treatments. It will show all of the charges that were submitted to Medicare for treatment or tests you received. It will include the name of the provider, the date of the service, how much they charged Medicare and how much was actually paid. Did you actually see those providers? Did you actually get those tests or treatments?
How to get help
If something on that notice seems suspicious, there are sources for help. The first is the local office of the State Health Insurance Assistance Program (SHIP). It’s a free, federally-funded program to help you navigate the Medicare system. You can find your nearest local office on their website.
You can also contact your state’s Senior Medicare Patrol. Their role is to assist Medicare beneficiaries, their families, and caregivers to prevent, detect, and report health care fraud, errors, scams, and abuse. Their website has a locator for the office in your state. Further disclosure: I’m a former volunteer for that organization.
Bottom Line: guard your Medicare number
By protecting yourself from Medicare scams and fraud, you are also helping protect the Medicare system. The taxpayer money you can help save for Medicare makes a huge difference in the lives of seniors and others who depend on it to cover their health care costs. (Abe Wischnia for Consumer Rescue)
*Before you go: What’s with all those Medicare TV commercials?