Medicare Part C, or a Medicare Advantage plan, allows many Americans to receive health coverage and enjoy expanded services that they may not have previously had access to. Unfortunately, many unethical providers may still try to take advantage of Medicare Part C plans. Because these schemes involve government contracts and taxpayer funding, indicators of fraud are reportable under qui tam law. Whistleblowers who speak up about defrauded Medicare Part C healthcare funds are eligible for significant financial awards.
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Understanding Medicare Part C and Fraud
Medicare Part C differs from “Original Medicare” because Part C recipients use a private health insurance plan through which they receive their Medicare benefits. These private managed care plans are provided through health insurers that contract with the federal government. Health insurance companies receive taxpayer-funded contracts to provide services to those who qualify for Medicare and choose to enroll in Medicare Advantage plans.
Medicare Part C plans may include some limitations on which offices or doctors patients can visit, as well as a different set of rules, costs, restrictions, and billing structures to the fund. However, many Americans find that enrolling in Medicare Part C also offers certain benefits. For example, 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 different billing structure involved in Medicare Part C, it’s also particularly rife with fraud. Unscrupulous health care providers or insurance companies may try to take advantage of government funding to “upgrade,” double bill, make diagnostic errors, or otherwise siphon funds from Medicare Part C.
Examples of fraud under Medicare Part C
Medicare Part C is a “capita” health care plan. Unlike traditional Medicare, which is a fee-for-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 varies based on an individual “risk score” per patient, which makes Medicare Advantage useful for managing certain long-term health care needs.
Medicare Advantage risk scores are based on patients’ diagnoses as well as their demographic information. For example, a Medicare patient who is older with a lifetime 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 serious diagnoses in their chart, often require higher payment amounts. Therefore, some health care providers may misdiagnose patients in an attempt to increase their risk score and receive more Medicare money. Similarly, health insurers may code certain diagnoses differently to show inflated risk scores and receive higher Medicare payments.
Common Medicare Part C Fraud Schemes and Their Consequences
Diagnostic errors are a particularly dangerous type of Medicare Part C fraud scheme. Patients who are misdiagnosed can suffer mental and emotional distress believing their condition is more serious than it actually is. They may also be subjected to unnecessary treatments, routine check-ups or even prescribed harmful drugs, all in the interest of increasing payment. Patients’ families can experience high levels of care and concern for their loved ones, all for conditions that may be much easier to manage than they seem.
Diagnostic errors contribute to about 10% of patient deaths. Medical errors are the third leading cause of death after heart disease and cancer. About four million Americans are expected to suffer serious harm each year due to misdiagnosis. Although many of these may be accidental, giving patients fraudulent diagnoses is dangerous and unethical for 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 as a whole.
How to report Medicare Part C fraud
Fortunately, there is a way forward to inform Medicare Part C and make the health care system safer and more affordable for everyone. Becoming a whistleblower means sharing previously unreported or undisclosed information to facilitate the recovery of embezzled government funds. By bringing about greater scrutiny of government contracts or forcing unethical providers to pay hefty fines, whistleblowers help discourage 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. Often, the best whistleblowers are those who work in healthcare or insurance and have insider knowledge of patient conditions and how services are reported or billed.
Why should I report Medicare Part C fraud?
Besides the satisfaction of doing the right thing, there are many other rewards for reporting Medicare Part C fraud. Whistleblowers are entitled to between 15 and 30 percent of the government’s total recovery if successful. In some recent cases, the fines collected ran into the high millions. For example, in a 2021 case involving a California health care provider, the plaintiff was entitled to up to 25 percent of a $90 million payout.
Whistleblowers are also protected by federal and state law against retaliation by their employers. Harassment, firing, threats, and reduction of pay, hours, or seniority are prohibited by law in cases of fraud.
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