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Medicare Advantage plans raise concern of easier fraud

Feb 13, 2015 | Fraud

Readers may or may not be familiar with Medicare Advantage plans, which are health insurance plans offered by private companies contracting with Medicare for coverage of Medicare benefits. These plans cover a wide variety of services, including hospital care, nursing home care, hospice care, home health care, ambulance services, clinical research, durable medical equipment and mental health services. Such plans have become popular as they offer more benefits than ordinary Medicare plans and cost less for seniors.

One of the concerns with these health insurance plans is that ineffective oversight may be resulting in widespread overcharging of the federal government. Earlier this month, a federal grand jury indicted a South Florida doctor on eight counts of health care fraud in connection with Medicare Advantage plans. The scam allegedly cheated Medicare out of $2.1 million in unnecessary payments, largely connected to exaggeration of the condition of patients. Concerns of fraud schemes like this one have led to a proposal to cut millions of dollars of funding, which has public health advocates concerned.

Some member of MedPac—the Medicare Payment Advisory Commission—have argued that the health risk scoring system used in Medicare Advantage makes it easier for “up-coding” to occur. Up-coding refers to the practice of billing Medicare for conditions which allow the provider to obtain greater compensation. Whether or not this is because of confusion over how the system works or because there are easier ways to cover up fraudulent billing isn’t clear.

Overcharging of Medicare is illegal, to be sure, but is not always a matter of fraud. In some cases, mistakes are made and are not caught until it is too late. Even in cases where fraudulent billing for medical services does occur, the guilty party should not be held responsible for more fraud than can be supported by the evidence. This, of course, is why it is important to work with an experienced criminal defense attorney when facing health care fraud charges.


NPR, “Fraud Case Casts Spotlight On Medicare Advantage Plans,” Fred Schulte, Feb. 13, 2015.

Medicare.gov, “Medicare Advantage Plans,” Accessed Feb. 13, 2015.


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