Fraud, Waste & Abuse

Medicare – Healthcare

Health Care Fraud is 

 “knowingly and willfully executing, or attempting to execute, a scheme or artifice

  • to defraud any health care benefit program; or
  • to obtain, by means of false or fraudulent pretenses, representations, or promises, any of the money or property owned by, or under the custody or control of, any health benefit program.” 

Healthcare fraud can result in civil and criminal penalties that include fines, monetary damages, and even imprisonment.  Additionally, there is a penalty of up to 20 years in prison or life in prison if the violation resulted in a person’s death. 18 U.S.C. §1347


includes overusing services, or other practices that, directly or indirectly, result in unnecessary costs to the Medicare Program. Waste is generally not considered to be caused by criminally negligent actions but rather by the misuse of resources.


includes actions that may, directly or indirectly, result in unnecessary costs to the Medicare Program. Abuse involves payment for items or services when there is not legal entitlement to that payment and the provider has not knowingly and/or intentionally misrepresented facts to obtain payment.  The Medicare Learning Network®

#Risk Adjustment Fraud?

making patients look sicker than they are,”

False COVID Statistics?


With COVID going on, so many on Facebook are saying the COVID numbers are inflated so that hospitals & insurance companies can get more $$$.   Based on the rules of Risk Adjustment Fraud, I don’t think so.  Here’s the CDC rules for reporting deaths due to COVID.   See also the video at right or scroll down.


UHC and Anthem Blue Cross (and another article) were once accused of “gaming” the Medicare Advantage payment system by

making patients look sicker than they are,”  Risk Adjustment Fraud?

Damages are speculated to top $1 billion.

Medicare Advantage is a popular alternative to traditional Medicare. The privately run health plans have enrolled more than 18 million elderly and people with disabilities — about a third of those eligible for Medicare — at a cost to taxpayers of more than $150 billion a year.

“This is not one company engaged in episodic bad behavior, but a lucrative business plan that appears to be national in scope,”

When Congress created the current Medicare Advantage program in 2003, it expected to pay higher rates for sicker patients than for people in good health using a formula called a risk score.


Learn More===>

Court Rules in favor of UHC

CA Health Line 5.17.2017  79 page lawsuit filed

CA Health Line 3.28.2017


Medicare Managed Care Manual
Chapter 7 – Risk Adjustment

sheppard health

1st amended complaint?

CMS identified violations and sent a notice on 11.22.2016 of Part D formulary and benefit administration requirements that resulted in UnitedHealth ’s enrollees experiencing inappropriate denials of and/or delayed access  to Part D prescription drugs at the point of sale.  The fine is $2.5M.

CA Healthline 5.30.2017 Freedom Health & Optimum Health Care settle for a $32m fine



IRS Urges Public to Stay Alert for Scam Phone Calls


The IRS continues to warn consumers to guard against scam phone calls from thieves intent on stealing their money or their identity. Criminals pose as the IRS to trick victims out of their money or personal information. Here are several tips to help you avoid being a victim of these scams:

  • Scammers make unsolicited calls.  Thieves call taxpayers claiming to be IRS officials. They demand that the victim pay a bogus tax bill. They con the victim into sending cash, usually through a prepaid debit card or wire transfer. They may also leave “urgent” callback requests through phone “robo-calls,” or via phishing email.
  • Callers try to scare their victims.  Many phone scams use threats to intimidate and bully a victim into paying. They may even threaten to arrest, deport or revoke the license of their victim if they don’t get the money.
  • Scams use caller ID spoofing.  Scammers often alter caller ID to make it look like the IRS or another agency is calling. The callers use IRS titles and fake badge numbers to appear legitimate. They may use the victim’s name, address and other personal information to make the call sound official.
  • Cons try new tricks all the time.  Some schemes provide an actual IRS address where they tell the victim to mail a receipt for the payment they make. Others use emails that contain a fake IRS document with a phone number or an email address for a reply. These scams often use official IRS letterhead in emails or regular mail that they send to their victims. They try these ploys to make the ruse look official.
  • Scams cost victims over $23 million.  The Treasury Inspector General for Tax Administration, or TIGTA, has received reports of about 736,000 scam contacts since October 2013. Nearly 4,550 victims have collectively paid over $23 million as a result of the scam.

The IRS will not:

  • Call you to demand immediate payment. The IRS will not call you if you owe taxes without first sending you a bill in the mail.
  • Demand that you pay taxes and not allow you to question or appeal the amount you owe.
  • Require that you pay your taxes a certain way. For instance, require that you pay with a prepaid debit card.
  • Ask for your credit or debit card numbers over the phone.
  • Threaten to bring in police or other agencies to arrest you for not paying.

If you don’t owe taxes, or have no reason to think that you do:

  • Do not give out any information. Hang up immediately.
  • Contact TIGTA to report the call. Use their “IRS Impersonation Scam Reporting” web page. You can also call 800-366-4484.
  • Report it to the Federal Trade Commission. Use the “FTC Complaint Assistant” on Please add “IRS Telephone Scam” in the notes.

If you know you owe, or think you may owe tax:

  • Call the IRS at 800-829-1040. IRS workers can help you.

Phone scams first tried to sting older people, new immigrants to the U.S. and those who speak English as a second language. Now the crooks try to swindle just about anyone. And they’ve ripped-off people in every state in the nation.

Stay alert to scams that use the IRS as a lure. Tax scams can happen any time of year, not just at tax time. For more, visit “Tax Scams and Consumer Alerts” on

Each and every taxpayer has a set of fundamental rights they should be aware of when dealing with the IRS. These are your Taxpayer Bill of Rights. Explore your rights and our obligations to protect them on


Scammers also know that whenever there’s a change or even discussion about possible changes in government programs or policy, the time is ripe to capitalize on consumers’ uncertainty by trying to get them to reveal personal information.


  • Government agencies already have your personal information on file. Unless you initiate contact, you will never be asked to provide or verify that data.
  • Don’t be fooled if your Caller ID screen indicates that a call is from an agency you recognize. Scammers have technology that lets them display any number or organization name on your screen.
  • Government agencies do not send unsolicited emails. Official correspondence is typically delivered by U.S. mail. If you get such a letter, you can authenticate it by looking up the agency’s phone number yourself in a directory and calling the agency.
  • Don’t expect government employees to make unannounced door-to-door visits about new or revised programs. You’ll typically receive advance notification of any official knock on your door, and your personal information will already be known to legitimate federal employees.

Fraud Statutes

Civil False Claims Act
Health Care Fraud Statute
 Criminal Fraud
•Anti-Kickback Statute;
•Stark Statute (Physician Self-Referral Law);
•Exclusion; and
•Health Insurance Portability and Accountability Act (HIPAA).
Office of Inspector General – Compliance Resource Center 

Links & Resources

Medicare & You – Publication #10050 – See Fraud Section

Help Prevent Fraud # 11491  double check your claims

Stop Medicare Fraud Website

Publication #10111 – Protecting Yourself and Medicare from Fraud

Fraud, Waste & Abuse Compliance Training CA Health

42 Code of Federal Regulations (CFR) Section 422.503(b)(4)(vi)(C);
•42 CFR Section 423.504(b)(4)(vi)(C);
•CMS-4159-F, Medicare Program Contract Year 2015 Policy and Technical Changes in the Medicare Advantage and the Medicare Prescription Drug Benefit Programs; and
•Section 50.3.2 of the Compliance Program Guidelines (Chapter 9 of the “Medicare Prescription Drug Benefit Manual” and Chapter 21 of the “Medicare Managed Care Manual”).
Serving as the umbrella for a variety of CMS education and communication activities, the MLN offers:

1.MLN Educational Products, including MLN Matters® Articles;
2.MLN Connects® National Provider Calls;
3.MLN Connects® Provider Association Partnerships;
4.MLN Connects® Provider eNews; and
5.Provider electronic mailing lists.

Fraud occurs when

someone knowingly lies to obtain some benefit or advantage to which they are not otherwise entitled or someone knowingly denies some benefit that is due and to which someone is entitled.

Learn More ⇒ California Department of Insurance on Fraud   

illicit billing scheme to defraud patients and health-insurance providers by routinely charging for unperformed services and unseen patients and exaggerating other treatments,  — count of health-care fraud conspiracy, one count conspiracy to commit money laundering, and six counts of money laundering.   five counts each of health-care fraud and making false statements relating to health-care matters. Mercury  5.25.2016

91 Charged in Federal Health Care Fraud Sting  Kaiser News

Individual Plans – Health Care Reform – Abuse of Special Enrollment Period – Blog Insure Me

File a complaint CA Dept of Insurance  Enforcement Branch Overview

Insurance Journal Fraud Search

Blue Shield – Fraud Unit(800) 221-2367

Report Fraud Waste or Abuse to Blue Cross

Consumer Resources

How to Avoid Becoming a Victim of Insurance Fraud
An illustrated brochure describing the warning signs of insurance fraud and some concrete steps you can take to avoid becoming a victim. This brochure contains information helpful to all consumers. It details several types of insurance fraud, such as fake policies, premium fraud, unlicensed agents, unnecessary services, and insurance scams. It also describes how to get your money back and where to complain about insurance fraud.

National Health Care Anti-Fraud Association is the leading national organization focused exclusively on the fight against health care fraud. We are a private-public partnership — our members comprise more than 100 private health insurers and those public-sector law enforcement and regulatory agencies having jurisdiction over health care fraud committed against both private payers and public programs. Established in 2000,

The NHCAA Institute for Health Care Fraud Prevention is a separately incorporated, tax-exempt educational foundation that provides education and training to private- and public-sector health care anti-fraud personnel.

Preventing Credit Card Fraud: Learn How to Protect Yourself
A brochure, available in English and Spanish that describes how crooks steal and use credit cards and card numbers and explains how to protect your credit card and what to do if your card has been stolen.
By Consumer Action.

California Court Website on Fraud & Cyber Crime

Report   Worker’s Compensation Fraud

Money Laundering

Patriot Act

Insurance Companies required to establish Anti Money Laundering Programs

  • Placement is the initial stage in which money from criminal activities is placed in financial institutions.
    • One of the most common methods of placement is structuring—breaking up currency transactions into portions that fall below the reporting threshold for the specific purpose of avoiding reporting or recordkeeping requirements. Because most carriers do not accept cash payments, insurance producers should be on the lookout for cash equivalents. Gene’s opening of multiple accounts and making payments with bank checks of less than $10,000 are examples of placement and structuring.
  • Layering is the process of conducting a complex series of financial transactions, with the purpose of hiding the origin of money from criminal activity and hindering any attempt to trace the funds. In this scenario, Gene’s movement of money between accounts and his exercise of the 10-day free-look provision are examples of layering.
  • Integration is the final stage in which an apparently legitimate transaction is used to return the now-laundered funds back to the criminal. Gene’s request to take redemptions from his mutual funds is considered integration as he now has checks from financial institutions.

How might waste and fraud cause premiums to go up?

Hospital Billing Inconsistencies?

The difference between the Hospital’s Price and Negotiated fees that I have seen on EOB’s (Explanation of Benefits) have often looked ridiculous.  Here’s more information from another angle.

Billing Codes – Satire or how it really works?

Hospital Fair Pricing Act Low Income Uninsured Get Discounts! Insurance Fraud

Cut through Confusion and Not Pay more than necessary LA Times 4.2013

Excerpts from LA Times 5.28.2012

  • The cash discounts evolved over time after hospitals were criticized in recent years for charging the uninsured their highest rates and then hounding them at times with overzealous collection efforts.
  • Many hospitals and physicians offer steep discounts for cash-paying patients regardless of income. But there’s a catch: Typically you can get the lowest price only if you don’t use your health insurance.
  • It frustrates people because there’s no correlation between what things cost and what is charged
  • Health insurance still offers substantial value for consumers by providing preventive care at no cost and offering protection from major medical bills that could bankrupt most families

Resources & Links

Filed Hospital Rates – State of CA

true cost of health care.orgMassive Waste – The  9.7.2012   Fraud

Spending likely to remain high.  LA Times 9.8.2012Fraud

ICD 10 Codes find a dr







False and Fraudulent Claims  1871-1871.8
Bureau of Fraudulent Claims 1872-1872.96
Insurance Fraud Reporting  1873-1873.4
Motor Vehicle Theft and Motor Vehicle Insurance
Fraud Reporting  1874-1874.81
Insurer Inspections  1874.85-1874.87
Auto Insurance Fraud Crisis Areas  1874.90-1874.91
Arson Investigations .1875-1875.8
Insurance Claims Analysis Bureaus 1875.10-1875.18
Insurer Fraud Investigation  1875.20-1875.23
Deposit of Automobile Insurance Claims                   Information .1876-1876.5
Workers’ Compensation Insurance Fraud Reporting   1877-1877.5
Insurance Fraud Prevention  §1879-1879.8

USC 1347 Federal Law on  Health Care Fraud

Medicare – Part D Fraud – Final Rules – Federal Register

Breaking News

CA Health Line 7.19.2017  Fraud & Billing mistakes in Medicare Advantage plans ran $16B in 2016, if you include standard Medicare $60B.

Orange County Register: Brea Man Gets Decade In Prison In $2.9 Million Dollar Medicare Fraud  A Brea man who used his rehabilitation clinics to submit millions of dollars in false Medicare claims was sentenced this week to more than a decade in federal prison, even as he awaits sentencing in a second health care fraud case. U.S. District Judge David O. Carter, during a hearing at the federal courthouse in Santa Ana, ordered Simon Hong on Monday to spend 121 months behind bars and to pay nearly $3 million in restitution, according to the U.S. Department of Justice. (Emery, 1/10)

Aetna wins $37.4 M civil judgement for fraudulent bills from Bay Area Surgical Management  Learn More===>  Mercury News 4.21.2016

Indictments – a doctor at the clinic documented evaluations that never happened, while staff falsified records to justify surgeries, some of which were unnecessary. Further, the indictment said some surgeries were performed by a physician’s assistant who had not attended medical school and was not overseen by a surgeon during the procedures.  Although the patient victims sustained physical harm, we who pay higher premiums for health care suffer economic harm when scams are allowed to continue unchecked” (Winton/Hamilton, “L.A. Now,” Los Angeles Times, 9/15).   CA Healthline 9.16.2015

Durable Medical Equipment Fraud – LA Times 9.4.2015

Nearly 250 people, including 46 providers, were charged with falsely billing Medicare a total of nearly $712 million   –  Medicare Fraud Strike Force, which has charged more than 2,300 people accused of falsely billing Medicare more than $7 billion since it was established in 2007  —

federal officials charged:

  • Three owners of a hospice service in Detroit who allegedly paid kickbacks for referrals from two physicians who wrote medically unnecessary prescriptions;
  • Two home health care companies in New Orleans that allegedly billed Medicare $38 million for glucose monitors they sent to patients regardless of medical need; and
  • Administrators of a mental health center in Miami that allegedly paid kickbacks to owners of assisted living facilities and patient recruiters (Department of Justice release, 6/18).  CA Health Line 6.19.2015  

More than 44 of the 243 suspects allegedly defrauded Medicare Part D, marking the first major crackdown on fraud of the prescription drug benefits program for seniors.

Fraud investigations – 3.3B recovered in 2014  Learn More ⇒ CA Healthline 3.19.2015

CA Healthline 12.5.2014 – New rule to allow Medicare to deny payments to providers with a history of abuse

Web visitor Q & A

Anonymous says:
What year are you working through these Death Plans? I have been fighting with UHCA (which is a misnomer because is has no advantage ) since 2018 and and up to Level 4 with appeals and Maximus.


There is no control over Managed Health Plans.
There are no consequences for Managed Health Plans abusing seniors taking money from Medicare and tell bold face lies to cover their tracks.

We need a class action case but who will we take on? All Managed Health Plans do these things to some extent. Things will only get worse.

I’m open for suggestions

I’m reluctant to give my name because there is no name attached to this web site.


8 comments on “Fraud, Scams, Waste & Abuse Risk Adjustment

  1. it is alleged Hocking created fictitious insurance policies and documents for clients, and accepted payments for the same, when no such policies existed. These actions resulted in Iowa consumers being left uninsured when they attempted to file a claim as a result of a loss.
    Cease & Desist Order

  2. September 30, 2020 More than 340 individuals were charged with submitting $6 billion in fraudulent claims to federal healthcare programs and private insurers for telehealth consultations and substance abuse treatment, among other services, the Justice Department announced Wednesday, describing it as the largest healthcare fraud takedown in history.

  3. Here’s an email I just got, that sounded legit as I do have pages on World Wild Travel, IVF and Medical Tourism:

    Dear Sir,
    Is it alright for me to come as a self sponsored patient to do IVF in your clinic.
    Please kindly give me a quote as well as account to make payment
    Thank you


    I googled and found this antifraudintl dot org/threads/olanrewaju-a-asuni.53926/

    What to post:
    1. Questions about internet fraud and scams.
    2. Questions about scam emails.
    3. Anything related to fraud.

    I also see, that in the To: line, my email was not there. Asuni must have sent dozens out at one time.

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