[2023 Top Fraud Trends Special Series] Medicare/Medicaid/Healthcare Fraud

Surgeon picking up surgical tool from tray. Surgeon is preparing for surgery in operating room. He is in a hospital.

This blog is part of a special series featuring top fraud trends predicted for 2023.

Federal investigators from the U.S. Department of Health and Human Services Office of Inspector General announced on December 5, 2022, that they hope to recoup almost $4 billion from health care fraud for fiscal year 2022 (which ended September 30, 2022). Take a moment to stop and look at that number — $4,000,000,000,000 in health care fraud, recouped in one year.

People quickly assign blame to the COVID pandemic for many things today and some will blame the pandemic for this for astronomical loss. But when we blame, we are also avoiding some hard truths. One of those truths being that no pandemic can be blamed for the actions of a fraudster. Sure, fraudsters used the pandemic as an opportunity to tap into the extra funds provided by the CARES Act. But despite the pandemic’s unprecedented nature, Medicare fraud schemes were on the uptick anyway.

It is safe to say that while pandemic funds fraud schemes could be winding down for various reasons, fraudsters will then focus on a new target. After all, the displacement theory argues that removing the opportunity for crime, or seeking to prevent a crime by changing the situation in which it occurs, does not actually prevent crime. It merely moves it around. In fiscal year 2022, the Medicare program cost $767 billion — about 13 percent of total federal government spending. In 2028, Medicare expenditures are forecast to reach $1.5 trillion! That’s a revenue growth opportunity for a fraudster!

In conceiving fraud schemes, fraudsters have the luxury of being creative because there’s access to a vast range of variables with which to formulate all sorts of wrongdoing. The fraudster has the entire population of our nation’s patients and the entire range of potential medical conditions and treatments on which to base false claims. Fraudsters also have the ability to spread false billings among many payers and insurers simultaneously, in both the private and public sectors.

They just needs a Medicare or Medicaid number.

The rest of a patient’s identity can be designed by the fraudster. The creation of new identities by combining elements of real and falsified information is one of the fastest growing online crimes in the U.S. With that Medicare or Medicaid number, and the knowledge that the Health and Human Services infrastructures can be vulnerable, the fraudster’s opportunities are as great as ever. Take a look at a few of 2022 cases to understand the mammoth damages done to government programs due to fraud.

  • Lab test kickback plot: $300 million

Ten people in Texas, two of whom were medical doctors, were indicted on healthcare fraud as part of an alleged lab testing scheme. The defendants were accused of engaging, paying, receiving, and soliciting a significant number of kickbacks to medical professionals for ordering lab tests.

  • Bogus marketing telemarketing scheme: $447.54 million

Minal Patel, of Georgia, conspired with patient brokers, telemedicine companies, and call centers to target Medicare beneficiaries for genetic and other laboratory tests that patients did not need.

  • Phantom billing telehealth plot: $1.2billion

The Department of Justice indicted 36 defendants in 13 federal districts across the United States in an alleged scheme of fraudulent telemedicine, cardiovascular and cancer genetic testing, and durable medical equipment. But the results of the testing were not used in treatment of patients.

Gradually, Medicare is being privatized through the so-called Medicare Advantage Plans. Unfortunately for the taxpayer, in 2022, most of the large insurers of this program have been accused in court of overbilling the U.S. government in a scam known as upcoding. Investigations are currently under way, yet Medicare Advantage Plan expansions are expected to still grow up for 2023. Hopefully, a multi-layered solution that includes physical identity, digital identity intelligence and behavioral biometrics will be implemented to curtail any further fraud.

Healthcare fraud is a big business, and it hurts us all. When thieves steal from Medicare and Medicaid, there is less money for our legitimate health care needs, even if $4 billion in stolen funds is recouped. Healthcare fraud needs to be stopped before it happens.


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Larry Benson, Senior Director of Strategic Alliances, LexisNexis Risk Solutions - Government

Larry Benson is responsible for developing strategic partnerships and solutions for the government vertical. His expertise focuses on how government programs are defrauded by criminal groups, and the approaches necessary to prevent them from succeeding.

Mr. Benson has 30 years of experience in sales and business development. Before joining LexisNexis® Risk Solutions, he spent 12 years founding and managing two software technology startups. During the 1990s he spent 10 years as a Regional Director helping to grow a New England-based technology company from 300 employees to 7,000. He started his career with Martin Marietta Aerospace working on laser guided weapons and day/night vision systems.

A sought-after speaker and accomplished writer, Mr. Benson is the principal author of “Fraud of the Day,” a website dedicated to educating government officials about how criminals are defrauding government programs. He has co-authored WTF? Where’s the Fraud? How to Unmask and Stop Identity Fraud’s Drain on Our Government, and Data Personified, How Fraud is Changing the Meaning of Identity.

Benson holds a Bachelor of Science in Physics from Albright College, and earned two graduate degrees – a Master of Business Administration from Florida Institute of Technology, and a Master of Science in Engineering from Lehigh University.