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The Most Common Types of Medicare Fraud, and How to Know It When You See It

Medicare fraud occurs often, but here is how you can sometimes spot it.

medicare fraudMedicare is a gigantic government program, so it’s no wonder that Medicare fraud exists. But what exactly is Medicare? It is a government-run health insurance program that uses private insurance companies to help administer payments for the healthcare services of millions of individuals. Medicare is typically for those 65 years of age and older, as well as younger individuals who may have a recognized disability.

With so many rules, regulations and people involved in providing Medicare, it’s not surprising that some find ways to cheat the system and steal money from the United States government, medical centers and patients. The following list describes some of the more common ways this cheating goes on and how to potentially spot it. By knowing how to spot it, you might be able to put a stop to it and even earn some money as a whistleblower.

Fake Billing

Fake billing occurs when an insurance company receives a bill for medical care a patient did not receive. Perhaps a patient got an X-ray for a possible broken bone. However, the X-ray revealed there was no broken bone, so the patient goes home with some ibuprofen. But the medical center sends a bill to the Medicare insurance company for not just the X-ray and the ibuprofen, but a cast as well, even though the patient didn’t receive a cast.

You can sometimes detect this type of Medicare fraud by carefully examining a patient’s medical bill. The patient will be the best individual for knowing what medical care they received. However, this isn’t always easy. The patient may not remember or even care, frankly, because they’re not paying the bill. In that case, it will be up to the United States government or the insurance company to spot it. But the only way they can figure out if fake billing took place is to compare the bill with other medical records, which is not an easy task.

Unnecessary Medical Procedures

Unlike fake billing, where there is a bill for a medical service the patient never received when there is an unnecessary medical procedure, the patient actually receives the medical care that the Medicare insurance company receives a bill for. This makes detection very difficult because even the patient won’t know there is a medical bill mistake. When a patient has a medical problem, they don’t know what’s going on or how to fix it. So how does a patient know if a particular medical procedure is not necessary?

Think about an instance when you might have excessive coughing, wheezing, and shortness of breath. Your doctor says you might have pneumonia and orders you to get a chest X-ray. You get the X-ray and it turns out you only have bronchitis. Was the chest X-ray necessary? How do you know? Maybe your doctor knew it was an unnecessary test and was trying to overbill your Medicare insurance provider. Or maybe your doctor was just trying to play it safe. Either way, if you don’t know, it’s unlikely the United States government will ever know.


Upcoding refers to the practice of billing the insurance company for a more expensive medical service than the patient actually received. In most instances, the higher medical bill will be for something related to the medical care the patient did receive. For example, a patient might go into the emergency room for fainting spells. The emergency room doctor diagnoses the patient with anemia. After providing a blood transfusion consisting of two pints, the hospital discharges the patient.

However, when the hospital bills the insurance company, the hospital will say that the patient had a lower red blood cell count than they really did. They might claim the patient received a blood transfusion consisting of three pints instead of two. As a result, the hospital can charge the insurance company more money.

Upcoding is common for at least two reasons. First, it’s tough to detect. The patient in the above example may not remember if they received one, two or three pints of blood during the transfusion. Additionally, when looking back at the treatment records, the doctors and nurses may not remember either.

Second, using special codes makes it easier to commit “service unbundling,” which refers to billing using individual codes for specific services instead of using a single code for a cheaper, packaged medical service. Not everyone will be familiar with these codes and most of the time, it’s a computer that reads the codes and processes the bills. The best way to spot it is to look for medical treatments that the patient never received.

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