Medicaid fraud is costing American taxpayers billions of dollars each year.
John LeBlanc with Manatt says that Medicaid fraud cases are increasing because more people than ever are signing up for healthcare benefits.
“With the implementation of Obamacare, there’s been this huge push to get people into managed care programs. That has been a huge boon to the healthcare industry as a whole, but it’s also opened up some new opportunities for people who want to commit fraud,” LeBlanc said.
The Medicaid program provides health insurance coverage for low-income individuals and families. It is funded jointly by the federal government and individual states. There are two types of Medicaid programs: the traditional fee-for-service program and managed care programs. In a traditional fee-for-service program, a patient receives medical treatment from any provider deemed appropriate by the state. In a managed care plan, patients receive their healthcare from a network of contracted providers within that state.
LeBlanc says that rampant fraud is being committed with managed care programs.
“Managed care is so ripe for fraud,” he said. “It’s interesting that while some states have had success in rooting out Medicaid fraud, others remain very wide open to abuse.”
According to LeBlanc, there are three types of Medicaid providers who commit fraud: those who overcharge the program, those who bill for unnecessary or nonexistent services, and those who use patient information to submit fraudulent claims.
“It’s very easy for providers to overcharge the program because there are no uniform billing standards,” LeBlanc said. “The billing practices depend on what each state allows. Some states allow providers to charge more than others.”
Another way Medicaid providers commit fraud is by billing for services that patients never received.
“Some providers will bill the program for procedures and services that were never actually performed,” LeBlanc said. “Other providers will overcharge Medicaid and then kick back a portion of the proceeds to patient-recipients.”
Medicaid fraud committed through identity theft is also on the increase.
“Some providers will go into a state’s Medicaid enrollment system and steal patients’ personal information,” LeBlanc said. “They’ll then submit claims in their names.”
LeBlanc says that it is nearly impossible to determine how much money fraud costs the government each year because so many schemes are being committed simultaneously. He notes that the cost of provider-based schemes is easily identified, but most other types of fraud are more difficult to investigate.
According to LeBlanc, since Obamacare was implemented, there has been a significant increase in prosecutions for Medicaid fraud. A total of 674 defendants were indicted on charges related to healthcare fraud in 2020, an increase of more than 8 percent from the fiscal year 2019.
LeBlanc says that even though he is very pleased with the increase in prosecutions, it will take a long time to get rid of this kind of fraud.
“It’s going to be a long-term fight,” LeBlanc said. “A stronger focus on enforcement is needed, as well as greater transparency and accountability within the system.”