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Government | Fraud & Risk Management

Medicaid Fraud and How to Prevent It


Medicaid fraud occurs when an individual or provider intentionally gives incorrect information so that Medicaid pays for certain medical services, whether existent or non-existent.

There are no exact statistics when it comes to Medicaid fraud. However, reports show that fraudsters cause the Medicaid Program billions of dollars. Consequently, they put the welfare and health of beneficiaries at risk. Anyone can commit this fraud. The schemes can be perpetrated by an individual or a group, including organized crime groups.

The most known type of Medicaid fraud is where individuals steal people’s medical identity and use it to obtain medical services, goods, or even obtain payment from Medicaid. However, there are other ways that individuals defraud Medicaid. Medicaid fraud can be divided into three broad categories, i.e., fraud brought about by the provider, fraud brought about by the patient, and fraud brought about by the insurer.

Medicaid Fraud by the Provider

1. Raising invoices for services not provided

This is a major area of Medicare fraud by providers. It happens when a medical provider bills for services they have not provided. For example, the provider can bill for x-rays when they did not take any or bill for blood tests when they did not draw any blood from the patient.

2. Giving prescriptions for unnecessary procedures or tests

Some providers prescribe unnecessary procedures or tests just so that they can get paid for the same.

3. Double billing

Double billing happens when a provider bills both Medicaid and a private insurance company.

4. Substituting branded prescriptions with generic drugs

Since generic drugs are cheaper than brand prescriptions, some providers give patients the generic drugs but bill the amount of branded prescriptions.

5. Exaggerating services given to patients (upcoding)

Some providers exaggerate the kind of service they give the patient. For example, a doctor can bill a patient for a one-hour session when he only sees them for 15 minutes.

Medicaid Fraud by the Patient

  1. Giving false information so that they qualify for Medicaid.
  2. Modifying receipts to defraud Medicaid.
  3. Fraudulently filing claims when they did not receive any services.
  4. Using another beneficiary’s Medicaid cover to get medical services.
  5. Duplicating medical IDs so that non-beneficiaries can get medical services.
  6. Selling their Medicaid numbers to criminals who use the information to bill Medicaid for non-existent services.
  7. Changing doctors’ prescriptions so that you get more drugs than required and selling the drugs to other people

Medicaid Fraud by the Insurer

  1. Understating the amount of money it owes the Medicaid provider.
  2. Lying to potential customers about the benefits of their health plan.
  3. Denying valid claims.

How to Prevent Medicaid Fraud

In an attempt to stop Medicaid fraud, the government introduced several programs. However, enforcement has proved to be difficult due to a large number of Medicaid providers and beneficiaries.

Therefore, there is a need for people to take a personal initiative to prevent Medicaid fraud. Here are a few ways you can prevent this fraud:

  • Do not share your Medicaid number and social security number with anyone other than a doctor or service provider.
  • Don’t let anyone other than your doctor or Medicaid provider review your medical data.
  • Note down all your doctor’s visits and any tests you get at the hospital.
  • Don’t request unnecessary medical services just because you have Medicaid.
  • Report any suspected incidents of Medicaid fraud to the relevant authorities.

What is the government doing to prevent Medicaid fraud?

The government is conducting thorough background checks before admitting individuals to the Medicaid program. Additionally, the government has invested in sophisticated technology that can flag suspicious patterns and ensure that only the rightful beneficiaries get services.

If you are trying to track down perpetrators of Medicaid fraud, contact us today to start your free trial.

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