Fraud & Abuse

Medicare fraud costs the United States government hundreds of millions of dollars each year. CMS works with other government agencies and law enforcement organizations to protect the Medicare Program from fraud and abuse. The following information provides you with important information about fraud and abuse as well as the government agencies responsible for protecting the Medicare Trust Fund.

Zone Program Integrity Contractors/Unified Program Integrity Contractors

The primary goal of ZPIC/UPIC is to investigate instances of suspected fraud, waste, and abuse. Functions of the ZPIC/UPIC include:

• Develop investigations early, and in a timely manner
• Take immediate action to ensure that Medicare Trust Fund monies are not inappropriately paid, and
• Identify any improper payments that are to be recouped by Medicare carriers, fiscal intermediaries, and Medicare administrative contractors

National Government Services refers all suspected fraud to the ZPIC/UPIC for additional investigation. This may include results found from:

• Provider medical review
• Beneficiary complaints, or
• Data analysis

The following table lists all ZPIC/UPIC, their zones, and states included in each zone:

All fraud cases developed by the ZPICs/UPICs are referred to the OIG for consideration and initiation of criminal or civil prosecution, civil monetary penalty, or administrative sanction actions. When the ZPICs/UPICs determines that a situation is not fraud, they refer the case back to National Government Services for additional provider education, medical review, or other appropriate action.

What Is Fraud?

Fraud is the intentional deception or misrepresentation that an individual:

1. knows to be false or does not believe to be true; and 
2. makes knowing the deception could result in some unauthorized benefit to himself/herself or some other person.

Examples of fraudulent behavior:

• Altering claim forms to obtain a higher reimbursement amount (including billing Medicare for appointments that the patient failed to keep)
• Billing for services or supplies that were not provided (including billing for appointments beneficiaries neglected to keep)
• Billing both the beneficiary and Medicare for the same service/item
• Billing preadmission testing prior to a hospital admission that should be included in that DRG (i.e., global fee)
• Deliberately applying for duplicate reimbursement in order to get paid twice
• Completing CMN for patients not personally and professionally known by the provider
• Unbundling or “exploding” charges
• Soliciting, offering, or receiving a kickback, bribe, or rebate
• False representation with respect to the nature of the services rendered or charges for such services, identity of the person receiving or rendering the services, dates of the services, etc.
• Filing claims for services that are noncovered but billed as if they were covered services

What Is Abuse?

Abuse involves incidents or practices that are:

• not medically necessary as defined by Medicare guidelines; or 
• inconsistent with accepted sound medical, business, or fiscal practices. 

Abuse can be identified when individuals unintentionally follow practices that result in unnecessary Medicare Program costs. Abusive practices may develop into fraud and be prosecuted as such.

Examples of abuse include:

• Unbundling charges
• Claims for services not medically necessary (to the extent furnished)
• Incorrectly apportioning costs on cost reports
• Violation of the Medicare Participation agreement
• Routine waiver of coinsurance and deductibles
• Improper or sloppy billing practices

How Do I Report Suspected Fraud?

One of the most important tools in helping prevent fraud is the reporting of suspected fraudulent activities by concerned employees or beneficiaries. The OIG maintains a hotline as a confidential means for reporting suspected fraud. If you suspect fraud, please contact the OIG using any of the following options:

Phone: 800-HHS-TIPS (800-447-8477)
Fax: 800-223-8164 (limit to ten pages please)
Email: HHSTips@oig.hhs.gov

Mailing address:

Office of the Inspector General
HHS TIPS Hotline
P.O. Box 23489
Washington, DC 20026

If you are attempting to report specific information proving Medicare fraud, please provide as much identifying information as possible. This may include the suspected individual’s name, address, and phone number, as well as any other details regarding the allegation.

Look for additional information from CMS about How to Report Fraud and Suspected Fraud or on the OIG Hotline Operations web page.

Department of Health and Human Services OIG

The Department of Health and Human Services OIG has developed A Roadmap for New Physicians: Avoiding Medicare and Medicaid Fraud and Abuse. The Roadmap summarizes the five main federal fraud and abuse laws (the False Claims Act, the Anti-Kickback Statute, the Stark Law, the Exclusion Statute, and the Civil Monetary Penalties Law) and provides tips on how physicians should comply with these laws in their relationships with payers (like the Medicare and Medicaid programs), relationships with vendors (like drug, biologic, and medical device companies), and relationships with fellow providers (like hospitals, nursing homes, and physician colleagues).

CMS Fraud Prevention Tools

CMS produced two fraud prevention training modules currently available on the Medscape website. These modules provide key information to health care practitioners and professionals on how they can assist CMS in preventing fraud and abuse, as well as highlight CMS’ efforts to fight fraud and abuse and explain how health care professionals can be part of these efforts. 

A total of 1.25 hours of continuing medical education (CME) credits can be earned for any Medscape user registered as a doctor or health care professional. Medscape accounts are free, and users do not have to be health care professionals to register for them. Register for a free Medscape account at https://profreg.medscape.com/px/registration.do.

• How CMS Is Fighting Fraud: Major Program Integrity Initiatives (requires Medscape user log in and password to access)
• Medicaid Program Integrity: Safeguarding Your Medical Identity
• Reducing Medicare and Medicaid Fraud and Abuse: Protecting Practices and Patients (requires Medscape user log in and password to access)

Instructions for Accessing the Medscape Modules

• Step 1:  Go to http://www.medscape.org. Medscape accounts are free of charge.
• Step 2:  Registration is on the upper right hand corner of the home page of http://www.medscape.org next to the log in field.
• Step 3:  To access the modules, first enter your membership log in information.