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How big is Medicare fraud?

By Jennie L. Phipps · Bankrate.com
Thursday, February 21, 2013
Posted: 1 pm ET

Whenever anyone from President Barack Obama on down talks about cutting the cost of Medicare, the discussion invariably segues to Medicare fraud.

How big a retirement planning problem is Medicare fraud?

In a May 2012 report, FBI Special Agent David Welker said, “The United States spends more than $2.5 trillion on health care annually, and rough estimates indicate that anywhere from 3 (percent) to 10 percent of all health care expenditures are attributed to fraud."

If you do Welker's math, the annual cost of fraud ranges from $75 billion to $250 billion. That's a lot of our hard-earned retirement money.

The Government Accounting Office doesn't think this estimate is far wrong. It reported that in 2011, Medicare and Medicaid paid an annual $65 billion in "improper payments." It defines "improper" to include payments that are made in error -- not fraud, but wrong just the same.

The government is working on the problem. In 2012, the Department of Justice and the FBI together recovered $4.2 billion in fraudulent payments. They opened 1,311 new criminal health care fraud investigations involving 2,148 defendants. Once these crooks are convicted, the Affordable Care Act authorizes more jail time. Medicare scammers will receive 20 percent to 50 percent longer sentences for crimes that involve more than $1 million in losses.

What can you do to help? Last year, the government funded Senior Medicare Patrols in every state. These are volunteers who are trained to identify and report health care fraud. If you would like to be one of them, go to SMPResource.org, and contact the office closest to you.

If you can't be a volunteer, at least be aware that fraud happens everywhere. Examine your bills, and question things that don't look right. If you aren't comfortable with the answer, you can report the problem to your local Senior Medicare Patrol office, and they'll take it from there.

Remember, it's your money.

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12 Comments
steve wright
February 22, 2013 at 9:25 pm

Medicare wouldn't get me a Rollator Walker because they had allready provided me with a standard walker that year. I went down to the medical supply store to get one on my own,saw the price and realized I couldn't afford one. The man there told me to go to CVS Health online and I got one (same brand & model) for $79.00.

Frankie Rader (MS>)
February 22, 2013 at 11:12 am

Medicare was charged with $700. for a Rollalator Walker later I found it in a Catalog for $89 to $300, basoilly the same thing only a pound or 2 lighter....I bought one for $89. to keep in my car,it folds mu;ch easier than the expensive ones.
That is a $611.difference.