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Medicare Part C Fraud: What is it and How to Stop It

Medicare Part C, or a Medicare Advantage Plan, allows many Americans to receive healthcare coverage and enjoy expanded services that they may not have had access to previously. Unfortunately, many unethical providers may still attempt to take advantage of Medicare Part C plans. Because these plans involve government contracts and taxpayer funding, indicators of fraud can be reported under qui tam law. Whistleblowers who speak up about defrauded Medicare Part C healthcare funds are eligible to receive significant financial awards.

If you have information about Medicare Part C fraud, speak to a qualified Medicare fraud attorney today. Our team at Tycko & Zavareei LLP has years of experience in bringing the truth to light and protecting the interests of brave whistleblowers who step forward. Contact us today for a confidential consultation.

Understanding Medicare Part C and Fraud

Medicare Part C differs from “Original Medicare” in that recipients of the former use a private health insurance plan through which they receive their Medicare benefits. These managed care private plans are provided through health insurers that contract with the federal government. The health insurance companies receive taxpayer-funded contracts in order to provide services to those who qualify for Medicare and who choose to enroll in Medicare Advantage plans.

Medicare Part C plans may involve some limitations in which offices or doctors patients may visit, as well as a different set of rules, costs, restrictions, and billing structures on the back end. However, many Americans find that enrolling in Medicare Part C also offers certain advantages. For instance, enrolling in Medicare Part C may allow patients to receive routine dental and vision benefits in addition to all Medicare Part A and B services. Some of the most common types of Medicare Part C plans are Health Maintenance Organizations (HMOs) and Preferred Provider Organizations (PPOs).

Unfortunately, because of the additional layers of specificity and the different billing structure involved in Medicare Part C, it is also especially rife with fraud. Unscrupulous healthcare providers or insurance companies may try to take advantage of government funding in order to “upcode,” double bill, commit diagnostic errors, or otherwise draw down Medicare Part C funds.

Examples of Fraud under Medicare Part C

Medicare Part C is a “capitated” healthcare plan. Unlike in traditional Medicare, which is a fee-per-service structure, Medicare Advantage insurers are contracted to provide government-funded benefits in exchange for a per-person or per-capita amount. The amount paid out varies based on an individual “risk score” per patient, making Medicare Advantage useful for managing certain long-term healthcare needs.

Medicare Advantage risk scores are based on patient diagnoses as well as their demographic information. For instance, a Medicare patient who is older with a lifelong history of smoking would likely have a higher risk score than one who is younger and has never smoked.

Patients with a higher risk score, or more severe diagnoses in their chart, often require higher payment amounts. Therefore, some healthcare providers may misdiagnose patients in an attempt to increase their risk score and receive more money from Medicare. Likewise, health insurers may code certain diagnoses differently in order to show inflated risk scores and receive higher payouts from the Medicare program.

Common Medicare Part C Fraud Schemes and their Consequences

Diagnostic errors are a particularly dangerous kind of Medicare Part C fraud scheme. Patients who receive faulty diagnoses may suffer mental and emotional distress believing their condition is more severe than it actually is. They may also undergo unnecessary treatments, routine screenings, or even be prescribed harmful medications, all in the interest of increasing a payout. The families of patients may suffer through heightened levels of care and worry for their loved ones, all for conditions that may be much more easily manageable than they seem.

Diagnostic errors contribute to about 10 percent of patient deaths. Medical errors are the third leading cause of death after heart disease and cancer. Annually, about four million Americans are expected to suffer serious harm due to a diagnostic error. While many of these may be accidental, purposefully giving fraudulent diagnoses to patients is dangerous and unethical to both the individual patient and the taxpayer. Medicare Part C fraud reduces the quality of care available to individuals as well as within the system overall.

How to Report Medicare Part C Fraud

Luckily, there is a path forward to report Medicare Part C and make the healthcare system safer and more affordable for everyone. Becoming a whistleblower means sharing previously unreported or unreleased information to facilitate the recoupment of misappropriated government funds. By prompting increased scrutiny of government contracts, or forcing unethical providers to pay hefty fines, whistleblowers help de-incentivize Medicare Part C fraud.

Who Can Become a Medicare Part C Fraud Whistleblower?

Anyone with knowledge of fraud is eligible to become a Medicare Part C fraud whistleblower under the False Claims Act. Oftentimes, the best whistleblowers are those who work in the healthcare or insurance field and have inside knowledge about patients’ conditions and the ways in which services are reported or billed.

Why Should I Report Medicare Part C Fraud?

In addition to the satisfaction of doing the right thing, there are many other rewards for blowing the whistle on Medicare Part C fraud. Whistleblowers are entitled to anywhere from 15 to 30 percent of the government’s total recoupment in the event of a successful case. In some recent cases, fines collected numbered in the high millions. For instance, in one 2021 case involving a California healthcare provider, the whistleblower was entitled to up to 25 percent of a $90 million payout.

Whistleblowers are also protected under federal and state law against retaliation by their employers. Harassment, firing, threats, and reduction of pay, hours, or seniority are all prohibited by law in cases of fraud. Some of the protections offered to whistleblowers include:

  • Reinstatement at seniority level
  • Backpay
  • Legal fees

Ask Our Lawyers about what Medicare Part C Fraud is and How to Stop it

If you know of efforts to defraud Medicare Part C or have suspicions of diagnostic errors or inflated billing practices, do not wait to speak up. Contact the expert law team of Tycko & Zavareei LLP today. Our qualified qui tam lawyers are available to help answer any questions you might have and fight for your rights as a whistleblower. Fill out our complimentary online consultation form to get in contact with someone from our team who can evaluate your potential case and advise you about next steps.

How can we help you?

Confidential Case Evaluation

Our experienced qui tam attorneys are available for a confidential, no-cost, no-commitment, initial evaluation of your case. Call us now at (202) 973-0900, or begin the process by completing our Confidential Case Evaluation Form.
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