Medicare Scams

Millions of dollars are stolen every year through Medicare scams and fraud.

The $460 billion Medicare program provides health coverage to 45 million elderly and disabled Americans annually. An estimated 10 percent, or $46 billion, ends up in the pockets of frauds, according to the Government Accountability Office.

It has been quoted that more than 80% of federal money recovered in fraud investigations has been stolen through health care services such as Medicare.

Medicare has been easy to rip off because it functions under an honor system. Essentially, Medicare and its private contractors are required to review and pay bills within 14 days, leaving the system vulnerable to criminals who churn claims.

The scam predominantly targets seniors, so if you know someone who receives Medicare health benefits, please make them aware of this scam.

How does the Medicare Scam Work?

It may involve a scammer ringing seniors and telling them that their medical benefits are ending and that they have a limited time to get a new card as the old one does not work any longer. If they don't act on it straight away they will not receive their social security check in the mail.

The threat is designed to get seniors to divulge their checking account number.

The Medicare scams may also include equipment manufacturers offering "free" products to individuals. Insurers are then charged for products that were not needed and/or may not have been delivered.

It can also include unnecessary and sometimes fake tests that are given to individuals at health clubs, retirement homes, or shopping malls and billed to insurance companies or Medicare.

There are also instances of providers billing insurers for services never rendered by changing bills or submitting fake ones.

Dead Doctors used in Medicare Scams

Over seven years, the federal program paid at least $77 million, but possibly as much as $92 million, to supposed medical equipment suppliers who used Medicare ID numbers of deceased physicians.

The government payments went to firms that said they supplied such devices as wheelchairs and oxygen equipment, which require a doctor's order or prescription.

One doctor's number was used 484 times from 2003 to 2006, even though the physician died in 1999, netting suppliers $544,789.

Using the ID numbers of dead doctors in the Medicare scams was reportedly like using Medicare as an ATM machine!

Medicare Scams Advice

According to the National Association of Insurance Commissioners, here are nine marketing do's and dont's that consumers need to know. Anyone who represents himself or herself as selling a Medicare policy:

  • Must be licensed by the state. Check with your state's insurance department to make sure the salesperson is a licensed agent. Find a link to your state insurance department's Web page
  • May not make unsolicited contacts with prospective beneficiaries, such as door-to-door sales, cold calls, or approaching you in a parking lot
  • Must have an appointment in advance before coming to your home
  • Must arrange with you in advance the type of products that will be discussed during a scheduled sales appointment. At the appointment, the salesperson may not try to sell you other types of insurance coverage than the type[s] agreed upon in advance
  • May not try to sell you products that are not related to healthcare [like a life insurance policy or an annuity] during a sales or marketing presentation of a Medicare prescription drug or Medicare Advantage plan
  • May not use certain healthcare settings, such as a doctor's office or a pharmacy, to attempt to sell you a plan
  • May not use an educational event to attempt to sell you a plan
  • May not offer you free meals at promotional or sales events
  • May not offer you gifts or other promotional items whose value exceeds $15

Tips to Avoid Medicare Scams

medicare scams
  • Never sign blank insurance claim forms
  • Don't deal with door-to-door or telephone salespeople who tell you services of medical equipment are free
  • Never give total authorization to a medical provider to bill you for services provided
  • Find out if your physician ordered equipment for you
  • keep your personal information like your Medicare card, identification number and Social Security number safe
  • Carefully review your insurer's explanation of the benefits statement
  • Ask your medical providers what they will charge you and what you will be expected to pay out-of-pocket
  • Don't send payments for a Medicare drug plan over the telephone or internet
  • Don't join a plan over the telephone, unless you called the plan
  • If you are told you have to join the Medicare prescription drug benefit or you will lose your other Medicare benefits, it is a Medicare scam as it is voluntary and supplements your other Medicare benefits 
  • You can protect yourself against health fraud by reviewing the advice on this USA Food and Drug Administration page on medicare scams
  • Report Medicare-related fraud by sending an email to or writing to Inspector General, HHS, Attention: Hotline, 330 Independence Avenue SW, Washington, DC 20201
  • Check the list of Medicare-approved prescription drug plans. The list of approved plans and other information about the program are available at Medicare

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