The Scope of Fraud, Waste, and Abuse on our Healthcare System

The National Health Care Anti-Fraud Association (NHCAA) cites that an average of 3% (at the low end) and 10% (at the high end) of healthcare spending is lost due to fraud. That translates to between $67 billion and $230 billion lost each year to fraud, waste or abuse. That estimates to between a $184 million and $630 million dollar loss per day, and this number is expected to increase every year as healthcare costs rise.* Healthcare fraud is believed to be the second largest white-collar crime in the United States. It is often mistaken for a victimless crime, but it affects everyone. Fraud causes insurance premiums to rise, and victims may be put through unnecessary or unsafe procedures. Victims of identity theft may find their insurance information used to submit false claims. This is a staggering cost, and we are committed to battling these unnecessary expenditures every step of the way.

Our Commitment

MemberHealth is committed to fighting healthcare fraud, waste, and abuse.

We have a dedicated FWA Program whose mission is to protect our employees, members, providers, first tier, downstream, and related entities, and the Medicare Trust Fund by administering an effective plan to prevent and detect fraud, waste, and abuse.

The FWA Program works diligently to investigate all allegations, correct known offenses, recover lost funds, and partner with federal and state agencies to prosecute violators to the fullest extent of the law.

Definitions

  • Fraud - an intentional deception or misrepresentation made by a person with the knowledge that the deception could result in some unauthorized benefit to himself/herself or some other person.
  • Waste - the over-utilization of resources. Using more resources or services than is necessary.
  • Abuse - activities that are inconsistent with typical practices, and that result in an unnecessary cost to the Medicare program, or in reimbursement for services medically unnecessary or that fail to meet professionally recognized standards for health care.

Common Types of Fraud, Waste and Abuse

The following are examples of a few common types of fraud, waste or abuse that may be encountered:

Pharmacies:

Pharmacy fraud takes on many forms. One way for members to assist us in identifying pharmacy fraud is to be aware of the following types of fraud so that they can report any unusual activity or suspected fraudulent behaviors:
  • Inappropriate Billing Practices
    • Billing for non-existent prescriptions
    • Billing multiple payers for the same prescription (except as required for coordination of benefit transactions)
    • Billing for brand when generics are dispensed
    • Billing for non-covered services
    • Billing for prescriptions that are filled but never picked up
    • Splitting prescriptions into smaller days supply to receive additional dispensing fees
    • Accepting or offering kickbacks or bribes
  • Prescription Drug Shorting
    • Pharmacy provides less than the prescribed quantity and intentionally does not inform the patient but bills for the full amount  (i.e., billing for 60 tablets, but only dispensing 30)
  • Prescription Refill Error
    • Pharmacy provides incorrect number of refills prescribed by the prescriber
    • Illegal Remuneration Schemes
    • Pharmacy offers, or pays, or solicits bribes or kickbacks to influence persons to prescribe different drugs, or steer patients to pharmacies
    • Pharmacy waives copays to entice members to use that store

Members:

We review member utilization and activities, and investigate potential fraudulent behavior in order to take appropriate action. Member fraud can take several forms. Among the kinds of activities that constitute member fraud are:
  • Identity Theft/Misuse of ID cards
    • Loaning or sharing ID cards with ineligible members in order to illegally receive the drug benefit
    • Prescription forging or altering
    • Person alters a prescription to increase the quantity or number of refills
    • Person creates a false prescription or alters a valid prescription to obtain drugs or benefits not prescribed
  • Doctor Shopping
    • Person consults a number of doctors for the purpose of inappropriately obtaining multiple prescriptions for narcotics, painkillers or other drugs
    • Doctor shopping may be indicative of an underlying scheme, such as stockpiling or resale of drugs on the black market
  • Prescription diversion and inappropriate use
    • Person obtains prescription drugs from a provider, possibly for a condition from which they do not suffer, and gives or sells this medication to someone else
    • Inappropriate consumption or distribution of a beneficiary's medications by a caregiver or anyone else
  • Misrepresentation
    • A member misrepresents their personal information such as identity, eligibility, or medical condition to illegally receive a benefit

Other:

We want our members to be aware of other types of fraud, waste, and abuse so that they can report any unusual activity or suspected fraudulent behaviors. Below are other potential fraudulent activities that should be reported.

  • Premium billing
    • Receiving premium bills from a company or individual you do not recognize
    • Requests for upfront payment of premiums before enrollment
  • Broker Agent Marketing Schemes
    • Falsifying application data
    • Enrolling non-existent members
    • Enrolling members without their knowledge or consent
    • Sales of non-existent policies or plans
    • Accepting or offering kickbacks or bribes to entice members to enroll
  • Identity Theft
    • A third party pretends to represent Medicare, the Social Security Administration, or the Part D Plan for the purpose of obtaining personal and/or financial information
    • Utilizing another person’s Medicare ID card to obtain prescriptions

What Your Patients Can Do To Protect Themselves

  • Always keep all personal information, such as their Medicare number and Social Security card, safe, just as they would a credit card or bank account number.
  • Never give personal information until they are certain that the person or product is approved by Medicare or MemberHealth.  Contact MemberHealth at 1-866-684-5353 if you have questions.
  • Always review their Medicare Summary Notice (MSN) or Explanation of  Benefits (EOB). Make sure their EOB does not show prescription drugs they did not receive.
  • Don't accept offers of money or gifts from providers for providing prescription drug services or share their Medicare or Social Security number.
  • Educate themselves about the Medicare Prescription Drug Program.

How to Report Suspicious or Fraudulent Activity to Community CCRx

We encourage our members to report all suspected fraudulent activities. All reports are treated as confidential and will be investigated. Please include as much detail as possible (e.g., dates and times, names, address, specifics about alleged fraud or abuse).

  • Contact Community CCRx Compliance/FWA:
    Fraud, Waste and Abuse Hotline toll free: 1-888-277-4149
    or
    Patrick Jeswald
    Director, Compliance Program Medicare Part D

    Patrick.Jeswald@caremark.com
    Phone: 480-661-2030
    Fax: 480-314-6974
    9501 E Shea Blvd
    Scottsdale, AZ 85260
  • Contact Customer Service toll free at 1-866-684-5353, 8:00 a.m. to 8:00 p.m. in your local time zone (TTY users call 1-866-684-5351) 7 days a week
  • Contact Medicare.gov

* The National Healthcare Anti-fraud Association (NHCAA). Anti-Fraud Resource, Consumer Info & Action