Sample Essay on Combating Medicare Fraud and Abuse

Combating Medicare Fraud and Abuse


In the management of healthcare institutions, different parties are usually involved in fraud and abuse of office. These types of malpractices have very severe effects both the operations of the government and also to the other stakeholders of the health facilities. The persons that are usually responsible for committing fraud are those that are given the mandate to take care of the interest of the stakeholders of these Medicare funds. The current structures put in place have revealed that high levels of fraud may end up crippling various companies who are attached to the Medicare sector (Kavaler, Alexander, & Kavaler, 2014). It is now quite important to understand the different precepts around fraud and abuse that needs to be mitigated and their adverse effects. The government has been losing millions of money through these fraudulent activities in Medicare. Various laws have been implemented to bring to a stop this behavior among the different stakeholders so that a favorable environment of doing business could be reached (Laursen, 2013).

This position paper is aims at highlighting the meaning of Medicare fraud and abuse with special attention to the various factors that lead to fraudulent activities in this sector. In specific, it looks into the examples of Medicare fraud and abuse. It also analyzes the various laws and stipulations that the government has put in place to curb and fight against the advents of Medicare abuse and fraud. This paper also highlights the various partnership agreements that have been instituted among the government agencies who are participating in the detection, prevention and the fighting of this menace in different organizations. It highlights the resources that are available that can be used in the reporting of the suspected conceptions of Medicare fraud and abuse. In general, this paper creates an understanding of how various companies can adequately deal with the issue of Medicare abuse and fraud.

Context of Medicare Fraud and Abuse

Medicare fraud is the submission of false documents or statements or trying to make misrepresentations of the various facts with the primary intention of getting federal health care disbursement of cash for which no entitlement exist. This would mean that one would be gaining from the payment even when the fund has not been used in the treatment of the sick person (Jurek, Mosay, & Neris, 2016). Additionally, fraud would emanate from the inception of knowingly accepting, or paying remuneration to lure reward referrals for the various items that are to be reimbursed by the health care program of the federal government. In this prospect, the government will end up losing lots of cash for the services that do not exist (Sparrow, 2000). From this definition, it is evident that any person can commit this act. It could be individual persons or even the big organizations who deemed to be the stakeholders of these government funds. Some of the vital organs of the government can collude in order to embezzle these funds without knowing the adverse effects that this activity has on the economic development of the various sectors of the economy (Ayatollahi, 2002).

Medicare abuses are those activities that have the effect of creating unnecessary costs that would be quite detrimental to the Medicare program. It does not entail the presentation of false documents but the inflation of the various costs which are entirely unnecessary in order to gain economically from the whole process. Some of the practical examples of the Medicare abuse are such as the excessive charging of the services rendered or the suppliers delivered, the misuse of various medical codes for claims, and billing for things that are not necessarily medical in nature (Laursen, 2013). Some of the organizations that are involved in this act are seen to have dirty deals in which they not only infringe the rights of the citizens in terms of access to medical health care, but they are also making it difficult for the government to fend for its economy. With this notion at stake, it is important for the companies to look into the behavioral conduct of those who are involved in such activities and make sure that they mold their behavior in the best way possible (Andrei, Coughlan, & Hennessy, 2002). As it stands, the current connotation brought in this stance is that the Medicare abuse is one predicament that needs to be stopped since its magnitude is quite high. The acts of Medicare fraud and abuse are those that transcends from the individuals level to the organizational levels hence it stands out to be a menace that needs to be given a retrospective through while combating it (Lee, & Oral, 2014).


In the investigation of the inception of Medicare fraud and abuse, it is important to look into the causes of fraud and abuse and put into context on how various companies can deal with them. This section elaborates the various reasons why most corporations and managers and the subordinates alike indulge in fraudulent activities. Some of the causes of fraud are discussed below.

The structure put in place to combat the incidences of fraud might be vulnerable and not strict in addressing such cases. The current situation at hand connotes that it is important to investigate on the controls placed at every point of authorization of documents and how the approval is communicated to the intended party. In the field of medicine, most Medicare fraud has occurred because of failure to inculcate stringent measure that surrounds the handling of various documents such as prescription papers and the payment receipts among others (Rashidian, & Joudaki, 2010).

Another pertinent cause is the failure to properly scrutinize the past behavioral conducts from different employees in the healthcare companies. It is a fact the kind of the management structure in terms of skills and professionalism will help stop fraud or spearhead the same. In some companies, during hiring, a proper background check is not done to accentuate their behavior in respect to the kind of roles they are deemed to have. Some managers do have the behavior of being money hungry and would do any illegal thing in order to get what they want.  In this prospect, it comes out clearly that the manager would act unprofessionally to (or “intending to”) gain much monetary favor (Rozovsky, 2008).

The pressure in the management to perform highly can also push these individuals to get involved in fraud and have in order to gain a competitive advantage in the market.  For example, privately owned hospitals might want to lure referrals into their organization by falsification of price charges which would then be inflated during the times of claim. In such a case, the doctors will be held accountable for this mischievous act which will eventually serve as a leeway through which fraudulent acts will be manifested (United States. 2009).

Effects of Medicare fraud and abuse

The act of Medicare fraud and abuse has a profound impact on the medical industry and the operations of the government. These effects have negative consequences not only on the economy of this country but also in the social welfare of the same. The provision of proper medical facilities and healthcare is dependent on the appropriate use of the Medicare funds. This transcends from the building of the hospitals to making sure that these hospitals as well staffed with proficient practitioners. Companies cannot afford to lose their hard earned money on the acts of fraud. The following are some of the adverse effects of Medicare fraud and abuse.


Decline in economic development

Fraudulent activities have been reported to lead to billions of losses in which the government could have used in doing various investment activities. This incident happens when the government and other companies have invested so much in the different schemes associated with the Medicare programs, but it cannot get the best returns on the funds they have spent due to fraud. For the companies like insurance companies who offer medical cover to thrive, these companies require returns from the funds that have been invested. The management who are practitioners should therefore strive to curb the notion of fraud so that they can reduce any risk of loss. The loss of millions of cash due to fraud impedes the economic development since the funds that could have been used to provide better social amenities will now be left in the wrong hands (Buppert, 2001).

Inefficiency in operations

Medicare fraud engulfs the medical industry leading to the stalling of various operations due to the high frequency of fraudulent activities. This transcends from the inception of the mischief of fraud to the loss of coordination of activities within the organization (Andrei, Coughlan, & Hennessy, 2002). The loss of funds to fraudsters is made the accessible of resources to drive the day to day activities tough. The reputational damage that comes with fraud makes the companies not to access funds quickly from the lenders who would want a proper management of the funds they have advanced to the enterprise.  In this prospect, the company will face the financial difficulty that emanates from the reputational damage and the inception of fraud (Michael, 2003).



Statutes to combat Medicare Fraud and Abuse

In trying to fight the various elements of Medicare abuse and fraud, the federal government has brought in some pertinent laws and regulations that are required in making sure that the perpetrators of these acts are brought to book. These laws are also preventive in nature and try to create awareness to those who would want to indulge in such activities. The following are some of the law and acts that have been instituted by the government to combat this type of menace.

The False Claim Act

This rule was established to protect the feral government who is the custodian of the Medicare fund program from any sale of substandard goods and service or overcharged prices. In this prospect, any practitioner who has been found to have the motive or the act of providing false information about the goods or the services furnished by the government should be charged in a court of law. The companies now have the mandate of using this act to protect since they are also just an institution like the government. The transcending effect of this notion is that the companies will have the strong will of suing any person who attempts to put up fraudulent claims on the institution and protect them from the collateral damage that would be caused. As it stands, the current context connotes that the companies should sell their products and services at their sole discretion while adhering to the law (Abedsaeedi, & Amiraliakbari, 2008). In order for the various companies not to fall into huge fines for presenting fraudulent claims, the company should carry out an internal and external audit with keen attention to uprooting any incidences of the manager colluding in committing fraud. The penalties that are available for those that violate the FCA are a fine of between $5500 and $11000. The plaintiff will also be compensated for any damages caused due to that false claim.

Criminal Health Care Fraud Statute

This act prohibits the real collaboration of the various health practitioners in making a scheme that would not only execute a fraudulent act but also create a disruption in the management systems of the health care funds.  In this prospect, companies may come together to form a scheme that is aimed at unprecedentedly benefiting these individuals in a false way. From this act, the owners of various organizations which have been affected can have a remedy. In the event that these people are perceived to have committed this kind of crime, they should be sued and given where this Act will apply in convicting and making them pay for the damages costs.  The companies should, therefore, take this advantage and ensure that it protects its investments from the unscrupulous fellows (Fisher, 2008).

The Civil Monetary Penalties Law (CMPL)

This act decrees heavy fines on the various items or services that have fraudulent claims. This means that in the event that any practitioner presents a claim of payment of a service or product supply which is not stipulated in the list of items to be paid, the person claiming this payment has breached the law and is liable for fines and penalties of up to $ 50,000. The object of claim can be which the Medicare is not permitted to pay or falsely presented, or the process might be against the Anti-Kickback Statute (Ellahimanesh, 2007).

Other ways of combating Medicare abuse and fraud

There are other vital ways in which the companies can deal with the advents of fraudulent activities and abuse in Medicare. One of them is the use of the Public-Private Health Care Fraud Prevention Partnership forum which unites the various public and the private bodies in trying to combat the crime which affects them directly.  The members of this partnership entail the federal government, the insurer and other state and private organizations that are affected by this menace. This collaboration is deemed to give a clear perception on the how best the fraud can be combated. In this way, the partnership will ensure that they share their information on the various incidences of fraud and how they can jointly deal with it. This notion would mean that if a practitioner has committed a fraudulent act, they would not be employed again in any of the organization owned by the partnership (Andrei, Coughlan, & Hennessy, 2002). The analysis carried out periodically by these schemes serves as a measure that would be used in making sure that they detect any looming fraud scheme.

The office of the inspector general is also a vital tool in combating the incidences of fraud. This office is charged with the mandate of ensuring that they investigate through thorough audit on the various facets of the fraud and give a strong report on the same.  Companies should take advantage of this office and report any case of fraud to this agency that will investigate and charge these people accordingly. Additionally, this body had the authority and mandate to deter various entities and individuals who are confirmed to be involved in any fraudulent act from taking part in the Medicaid, Medicare, and other government health program (Andrei, Coughlan, & Hennessy, 2002). This mandate is very essential in helping the various companies to not only follow the precepts of not being fraudulent but also to remove any unscrupulous companies who wants to gain competitive advantage through fraud. In most cases, this office gives the citizens much faith in terms of the security of their funds and the profound usage of the same by the government (Andrei, Coughlan, & Hennessy, 2002).

There has also been an inception of an intelligent communication system that is geared towards getting information about fraud in the quickest and the safest way possible. The formation of the call center to report fraud makes it quite easy for every person to whistle blow on any information about fraud that is happening in any company. This information system transcends from the insurance companies to the government officials, the state and private organizations among others (Michael, 2003). This well-stratified interconnection of the data network is very critical in helping the companies to trail and combat fraudulent cases that may present themselves in this advent. Most of this calls made about the fraud are anonymous, and hence, they are deemed to protect the identity of the whistleblowers for security purposes. Hence, it is a well-coordinated way in which most Medicare fraud and abuse cases could be got and investigated accordingly.

Lastly, to understand what Medicare fraud is, its effects, prevention, causes and how to combat it, there is the need for an inception of a resources center that would be used in enlightening the public on what to do when they suspect fraud. This resource is very critical in ensuring that the public gets the first-hand information on how to deal with fraud. The creation of awareness is also vital in making sure that we teach citizens on the dangers of fraud and the main reasons why they should desist from it (Andrei, Coughlan, & Hennessy, 2002).


In conclusion, the incidence of Medicare fraud and abuse is one menace that needs to be combated in the most efficient way possible. The current structures that have been put in place have revealed that some the high levels of fraud may end up crippling the various companies who are attached to the Medicare sector. It is now quite important to understand the different precepts around fraud and abuse that needs to be mitigated and their adverse effects. The government has been losing millions of money through these fraudulent activities in Medicare. Various laws have been implemented to bring to a stop this behavior among the different stakeholders so that a favorable environment of doing business could be reached. Therefore, it is the responsibility of everyone to stop the acts of Medicare abuse and fraud.


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