How to Join the Fight in a New Crackdown on Medicare Fraud

When Medicare scammers targeted Joe O’Malley two years ago, they picked the wrong guy.Mr. O’Malley, a retired computer programmer in Orange County, Calif., was having kidney dialysis when a woman approached and asked if he wanted a new glucose monitor for his diabetes.

“I didn’t need a new monitor, and I don’t know how she knew I had diabetes,” Mr. O’Malley says. Though he declined the offer, a new glucose monitor soon arrived in the mail, followed by glucose test strips that he also hadn’t ordered. On his monthly statement, he saw that Medicare had been charged for everything—including 300 times the typical cost of the test strips.

Another consumer might have shrugged it off, since Medicare paid the bill. But Mr. O’Malley is a member of the Senior Medicare Patrol, a nationwide cadre of volunteers who help older adults understand the system and fight fraud. He filed a report with Medicare investigators, who tracked down the con artists and got the money returned. “When you think how many other people they might have done this to,” Mr. O’Malley says, “that could add up to quite a few bucks.”

Nobody knows exactly how much money is lost to bogus and inflated medical bills every year. The National Health Care Anti-Fraud Association, a public-private partnership, says it could be as much as $255 billion—enough to cover 60% of the Americans who lack health insurance. Medicare is particularly vulnerable, since it pays most claims unquestioningly. The Obama administration recently began a new crackdown on Medicare fraud, hoping to save $2 billion over 10 years.

Stay Alert
In many cases, consumers are the unwitting vehicles for bogus charges. Health-care officials urge them to be vigilant about the goods and services charged to Medicare and insurers on their behalf. “Five percent of the providers out there are crooks, and some of the things they do would astound you,” says Barry Johnson, chief executive of HealthCare Insight, which looks for fraudulent patterns in insurance claims. The company’s Web site,, includes tips on avoiding common scams and forms to report suspicious activity.

That’s also the mission of the Senior Medicare Patrol, or SMP. It began in 1997 as the brainchild of Sen. Tom Harkin of Iowa, who thought a group of trained volunteers could help identify and prevent fraud. The program now has groups in all 50 states and more than 4,685 volunteers. Since its inception, it has recovered $4.5 million in Medicare funds. SMP volunteers “are one of the most valuable resources we have,” says Don Kennedy, director of the Los Angeles field office of the Centers for Medicare and Medicaid Services.

Medicare fraud runs the gamut from individual doctors inflating charges to organized-crime rings trafficking in stolen ID numbers. Phony solicitors may call older adults offering to replace their complicated prescription drug benefit for a flat monthly fee—and all they need is the person’s Medicare and credit-card numbers. “Older people are often very trusting, and these people work at being ingratiating,” says Barbara Dieker, director of the Office of Elder Rights at the U.S. Administration on Aging, which oversees the SMP program.

In another common scam, people known as “cappers” will stand outside a senior center, offering free wheelchairs or other equipment. Then they drive the unsuspecting Medicare beneficiaries miles away by van for a “physical”—which is simply a ruse to obtain their Medicare numbers. The con artists may bill Medicare for a $6,000 wheelchair, then deliver a cheap scooter and pocket the difference, or deliver nothing at all.

Avoiding Trouble
The vast majority of health-care providers are honest and trustworthy; some may be victims of ID theft themselves, since the con artists need a doctor’s order for the equipment and services they sell. Experts and SMP volunteers offer these tips to avoid falling prey to the few unscrupulous ones:

Guard your ID number. Treat it like a credit card. It’s just as valuable and subject to theft. Give it only to your own doctor’s office or hospital. Never give it out to telephone or door-to-door solicitors, or leave it on phone messages. Though it is theoretically possible to replace a Medicare card, “once it’s compromised, it’s a long hard road to fix it,” says CMS’s Mr. Kennedy.

Beware of “free.” Be suspicious of free services, or providers who habitually waive deductibles and co-pays. It may mean they are inflating charges elsewhere. And be aware of what Medicare does and doesn’t cover. A podiatrist’s trimming of everyone’s toenails at an assisted-living facility would rarely be covered by Medicare. And if the doctor is billing Uncle Sam for a $100 “debridement procedure” on each person, it’s fraud.

Check your statement. Make sure every charge on your monthly Medicare statements is for something you actually ordered and received. Keep your own list of your doctor visits and dates so you can compare. “People may go in for something basic, like cataract surgery, but they are billed for a retinal transplant,” says Julie Schoen, director of the SMP in California.

If you find discrepancies, notify the insurance company on your statement, or call 1-800-MEDICARE or your local SMP office ( has a list). SMP is also seeking more volunteers to join the fight against fraud. “It’s extremely satisfying,” says Ms. Dieker.

–Ms. Beck writes the Journal’s weekly Health Journal column. She can be reached at

Copyright 2011 Dow Jones & Company, Inc. All Rights Reserved

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