Health Care Fraud

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The high cost of health care is a major concern to all citizens today. The Pennsylvania Medicaid Program, during the last fiscal year, spent over $6.3 billion on health care for the poor, disabled, as well as needy senior citizens residing in nursing homes. One of the factors contributing to the continually rising cost of health care is fraud. It is estimated that fraudulent activities impact on at least 10% of our health care costs.

The Pennsylvania Office of Attorney General, Medicaid Fraud Control Section, is responsible for investigating and prosecuting health care providers, and others, who defraud the state Medicaid Program. When the fraudulent provider is prosecuted, the penalties are severe. A violation of the Medicaid Fraud statute is graded as a felony of the third degree with a maximum penalty of seven years imprisonment and a $15,000 fine.

There are over 50,000 health care providers who have contracted with the Pennsylvania Department of Public Welfare, Medicaid Program to provide health care services to over 1.5 million Medical Assistance recipients residing in the Commonwealth. These enrolled health care providers include, among others, physicians, dentists, podiatrists, chiropractors, hospitals, home health agencies, ambulance companies, nursing homes, nurses, pharmacies, durable medical equipment companies, drug and alcohol clinics, laboratories, diagnostic medical practices, rural medical clinics, and family and therapeutic practitioners. Over the more than 20 years that the Medicaid Fraud Control Section has been in existence, the Section has investigated fraudulent activity involving all types of health care providers in a wide variety of schemes, including the following:

Billing for Services Not Rendered The Medicaid Fraud Control Section has investigated and prosecuted numerous instances in which physicians, chiropractors, dentists, or other types of health care providers, billed the Medical Assistance Program without providing any service. Unscrupulous providers, including pharmacies and durable medical equipment companies, once they obtain a recipient's Medical Assistance Identification Number, have been found to bill the program for medication or supplies never delivered. This type of fraudulent activity is engaged in by almost all provider types.

Misrepresentation of Services The Medicaid Fraud Control Section has detected situations in which providers bill for more expensive services than they actually render. For instance, a podiatrist who trimmed a patient's toenails may bill the Medicaid Program for a simple surgical procedure that is reimbursed at a higher rate or a pharmacist may dispense generic drugs, but bill the Program for more expensive brand name medication.

These types of fraudulent schemes also involve situations in which a provider renders a service that is not paid for by the Program, so they bill as if they rendered a service that is compensable. For example, pharmacies have dispensed medication which is non-compensable, but have billed the Program for a drug that is compensable. Additionally, since Medicaid does not pay for patients to be transported to their doctor for routine visits, some ambulance companies have billed the program for emergency transportation so as to obtain payment from the Medical Assistance Program.


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