MEDICARE FRAUD AND ABUSE

 CURRENT MEDICARE FRAUD SCHEMES OF 
CLINICAL LABORATORIES

Why laboratory services?

• Beneficiaries have not received EOBs/MSNs; Medicare pays 100%.
• Physicians do not see what the laboratories bill to Medicare.  For most lab tests Medicare has not required labs to submit diagnosis or symptom information to support the need for the services.

FRAUD SCHEMES:

• Labs have added tests not ordered by the physician and billed them separately to Medicare.
• Labs market their tests as panels to the physicians, but split certain tests out of the panels and bill them separately to Medicare.  For example, a physician will order a "Chem 14", which the lab has identified as a panel containing 14 specific tests.  The physician understands that the tab will bill the service as a 14-test automated panel.  However, the lab bills Medicare for a 12 test panel and bills separately for two of the tests, increasing their Medicare payment.
• "Rolling labs" have gone to senior centers, shopping malls, etc. and offered "free" diagnostic tests.  Patients are required to complete a registration form which includes their insurance billing number. The insurers are then billed for a variety of test the beneficiary never received.
• Labs have billed for services not ordered or provided.  In a 60-day period one lab submitted to Medicare 717 claims for 416 beneficiaries (many of whom were already dead) and received $330,000. One of the "referring" physicians listed on the claims had been dead for 2 years.  In a random sample, nearly a third of the beneficiaries had never received services from the lab or did not know the referring physician listed on their claims.

THINGS TO LOOK FOR:

• "Free" services billed to Medicare or other insurers.
• Dates of service on laboratory claims should generally be within 7-10 days of a practitioner visit.  (Lab services must be ordered by a physician or other licensed practitioner.)
• Review EOBs/MSNs to insure services billed coincide with services provided.