Fraud“Avoidance is the most straightforward way of dealing with conflicts of interest.”
(Reference 1)

Of course you follow good medical practices, but do you ever find yourself keeping someone in the hospital one more night so that they can qualify for 30 days in a skilled nursing facility?  The purpose of this blog post is to illuminate common types of Medicare fraud and/or abuse to remind ourselves that we, though often part of a solution to a patient’s problem, can be part of the problem of rising health care costs.

As a medical provider who works with Medicare reimbursement, are you in conflict knowing that your company’s finances are dependent on the revenue you create?  If Medicare will reimburse you for an echocardiogram every six months for a certain patient, do you order those tests as a practice or do you really look at the patient’s physical needs, as well as, their [the patient’s] values and desires? Do you tell yourself that the repeated tests prevent hospitalizations?  Are you sure about that with all of your patients?  Have you looked at the latest research?

It is difficult to be a good steward of Medicare funds. The funds don’t come from a bank account that we see and if you are not in administration you aren’t usually involved with reporting. Medicare feels somewhat like an unlimited fund. Many providers unintentionally abuse Medicare. According to the Centers for Medicare and Medicaid Services website, “Abuse happens when doctors or suppliers don’t follow good medical practices, which leads to unnecessary costs to Medicare, improper payment, or services that aren’t medically necessary.” (Reference 2)

The following are some examples of fraud and abuse that you might spot in your practice.  Though some of these are egregious and you may never see them, some are a little simpler and you can do something about it right away.  If we as a community cut down on Medicare waste, there will be more available for those who need it the most.

Medicare Fraud and Abuse Examples: Take a look at your practice

  • Phantom billing – Billing for tests not performed. Performing inappropriate or unnecessary procedures.
  • Charging for equipment/supplies never ordered.
  • Billing Medicare/Medicaid for new equipment but providing the patient used equipment.
  • Billing Medicare/Medicaid for expensive equipment but providing the patient cheap equipment.
  • A drug or equipment supplier completing a Certificate of Medical Necessity (CMN) instead of the physician.
  • Reflex testing – Automatically running a test whenever the results of some other test fall within a certain range, even though the reflex test was not requested by a physician.
  • Defective testing – When a test or part of a test was not performed because of technical trouble (i.e., insufficient or destroyed sample, machine malfunction) but is billed for anyway.
  • Code jamming – Laboratories inserting or “jamming” fake diagnosis codes to get Medicare/Medicaid coverage. Offering free services or supplies in exchange for your Medicare or Medicaid number. Unbundling – Using two or more Current Procedural Terminology (CPT) billing codes instead of one inclusive code for a defined panel where rules and regulations require “bundling” of such claims.
  • Submitting multiple bills, in order to obtain a higher reimbursement for tests and services that were performed within a specified time period and which should have been submitted as a single bill.
  • Double billing — charging more than once for the same service, for example by billing using an individual code and again as part of an automated or bundled set of tests.
  • Up coding – Inflating bills by using diagnosis billing codes that indicate the patient experienced medical complications and/or needed more expensive treatments. (e.g., billing for complex services when only simple services were performed, billing for brand-named drugs when generic drugs were provided, listing treatment as having been for a more complicated diagnosis than was actually the case.)
  • Improper cost reports — Submitting false cost reports seeking higher Medicare reimbursements than permitted by actual facts.
  • Providing substandard nursing home care and seeking Medicare reimbursement. (Reference 3)

Our guest blogger this week is Meredith Masel, PhD, MSW. She is at the Oliver Center for Patient Safety & Quality Healthcare.


  1. Nagaldinne, GK and Bakansas, EL. Why is Medicare Wasting Away? Forum: Bander Center for Medical Business Ethics, Jan 29, 2011.
  2. Report Fraud & Abuse.
  3. Common Types of Qui Tam Fraud.

Join us for a real-time discussion about ideas raised by this essay on Tuesday from 12:00 p.m. to 12:45 p.m. See Discussion and SL tabs above for details. Link to the virtual meeting room: