Medicare Abuse: How to Identify It, What to Do

Medicare abuse occurs when a Medicare plan is charged unnecessarily. It’s an illegal practice that costs the U.S. healthcare system billions of dollars every year.

When Medicare abuse occurs, taxpayer money is not spent on necessary medical care. The extra spending reduces what’s left in the Medicare trust fund. Medicare may charge you more premiums and other out-of-pocket costs to make up the difference.

This article will discuss the different types of Medicare abuse, what to look for, and what you can do to report it. When you take action against Medicare abuse, you protect yourself and reduce the burden on your entire health care system.

What is Medicare Abuse?

In 2020 alone, the Centers for Medicare and Medicaid Services reported nearly $43 billion in improper Medicare payments. Some of these payments may be appropriate but lack the necessary documentation to prove it. Yet another part is entirely due to Medicare abuse.

To protect yourself from Medicare abuse, you need to understand what it is and what to look for.

What is the difference between Medicare abuse and Medicare fraud?

People often use the terms Medicare fraud and Medicare abuse interchangeably, but technically there is a difference between the two.

According to the Centers for Medicare and Medicaid Services, Medicare fraud occurs when a person (individual, group, or institution) knowingly attempts to obtain payment from a Medicare plan when they are not entitled to it.

Medicare abuse, on the other hand, may not be intentional, but likewise adds unnecessary costs to the plan. Whether it’s fraud or abuse, you should be aware of them because they can affect your bottom line.

Examples of Medicare Fraud

Billing for Services Not Provided: Healthcare providers can bill Medicare for visits you schedule but do not attend. Likewise, they may bill you for services not performed or for medical supplies you never received.

Inappropriate billing: You may be billed for preventive care services that should be free. You may be required to pay a co-payment when not required. Instead, your healthcare provider can refuse to bill Medicare and bill you directly for services covered by Medicare.

Order services and supplies they know are unnecessary: ​​Healthcare providers can order unnecessary drugs, tests, and supplies with the goal of increasing Medicare reimbursement to them.

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Using inappropriate incentives to attract business: Someone can pay rebates to get more patient referrals or accept rebates to give them.

Requesting Information and ting False Claims: Someone may offer you a discount or rebate to get your health insurance number. Others may try to convince you to give them that information in a phone scam. Be careful as they may submit false claims using your Medicare number.

Examples of Medicare Abuse

Upgraded bills: The more complex or lengthy an office visit, the more a healthcare provider can charge. Some health care providers may aggregate the time they spend during their visits to bill for a higher level of care. They may also add billing modifiers that reflect wider access, but they may not always use them correctly.

Split-bundle services: Some services, especially surgical procedures and some inpatient services, are bundled together and Medicare pays them as a flat fee. A healthcare provider or facility can break out these services and bill you separately.

Ordering unnecessary tests and supplies: Healthcare providers may order tests or services that may not be medically indicated. They can also overuse the service by recommending too many office visits and lab tests. Also, they may prescribe more medication than is needed to treat your condition.

Charge more than recommended for services and supplies: Medicare sets rates each year for its services. Participating providers cannot charge more than this amount. Non-participating providers (that is, they accept Medicare payments but do not agree to the Medicare fee schedule) can charge you up to 15% of the recommended rate.

However, medical equipment providers have no limits on how much they can charge and can take advantage of you with overpriced items.

The Line Between Medicare Fraud and Abuse

Many of the examples of Medicare abuse listed here could constitute fraud if the individual or entity performing these examples knew they were violating Medicare policy.

Penalties for Medicare Fraud and Abuse

Several laws have been enacted to protect the government from these practices. Anyone who commits Medicare fraud and abuse can face serious consequences ranging from imprisonment to financial penalties. Not only can they be asked to pay back any claims, in some cases, they can pay up to three times the damage.

People found guilty of Medicare fraud could be excluded from participation in Medicare and other federal programs in the future. Medical licenses may also be suspended or revoked.

As of September 2020, the Medicare Fraud Task Force reported 3,075 indictments worth $3.82 billion. In May 2021, the Department of Justice (DOJ) cancelled a COVID-19 and telehealth program for Medicare beneficiaries for $143 million.

While not limited to Medicare, the DOJ also charged 138 healthcare professionals, 42 of them physicians, with $1.4 billion in healthcare fraud in September 2021.

Signs of Medicare Abuse and Fraud

Medicare abuse goes beyond the high-profile cases you hear in the media. It usually happens on a smaller scale. Not your own fault, it could even happen to you. You can be proactive by keeping an eye out for any suspicious activity.

If you have Original Medicare (Parts A and B), be sure to check your quarterly Medicare Summary Notice (MSN). The Center for Medicare and Medicaid Services will mail it to you every three months. It includes a list of all Medicare services you received during this period. Make sure MSN matches your record.

Ask yourself the following questions:

  • Did I get care during these service dates?
  • Have I received care at these facilities?
  • Am I getting care from these providers?
  • Are there recurring charges?
  • Does my receipt show that I paid more than the “maximum amount you may be charged”?

You will not receive a Medicare Summary Notice for Medicare Advantage (Part C) or Part D prescription drug plans. In these cases, you’ll need to review the Explanation of Benefits (EOB) that your plan’s insurance company mails to you each month. They will include similar information.

How to Handle Medicare Abuse

If you find an error on MSN or EOB, there are a few steps you can take. The first thing you will do is contact your healthcare provider’s office. This could be a simple billing issue that can be easily corrected.

If this doesn’t solve the problem, or you notice something more suspicious (for example, trends in unexplained charges or misbilling), you will need to take action and report it to the appropriate authorities so they can investigate.

For Original Medicare:

  • Medical Insurance: 1-800-MEDICARE (1-800-633-4227) or TTY 1-877-486-2048
  • Advanced Medicare Patrol National Resource Center: 1-877-808-2468
  • Office of the Inspector General: 1-800-HHS-TIPS (1-800-447-8477) or TTY 1-800-377-4950

For Medicare Advantage and/or Part D plans:

  • Medicare Drug Integrity Contractor (MEDIC): 1-877-7SAFERX (1-877-772-3379)

When contacting you, you will want to have the appropriate information on hand. This will include your name, Medicare number, claim information, and any billing discrepancies between the claim and your records.


Medicare abusers increase Medicare spending, but they do so unintentionally. Medicare fraud, on the other hand, occurs when funds are intentionally, voluntarily, and illegally withdrawn from a plan.

Whether fraud or abuse, unnecessary costs to the Medicare program cost everyone. Knowing what to look for will protect you and your entire health insurance plan. Be proactive and report any suspicious activity you see.

VigorTip words

Medicare abuse is a very common practice. It is important to record any services you receive so you can compare them to your Medicare statement. When you spot a difference, don’t hesitate to investigate.

Whether it’s contacting your healthcare provider to fix a small problem or reporting a bigger problem to the authorities, taking action now can save you and hopefully prevent future Medicare abuse.

Frequently Asked Questions

  • What is considered Medicare abuse?

    Medicare abuse can occur when a health care provider or facility adds unnecessary costs to the plan. By definition, these practices are not designed to take advantage of Medicare, but they do not meet the usual professional standards of business or medical practice.

  • What are the most common types of Medicare abuse?

    One of the most common types of Medicare abuse is improper medical billing. Healthcare providers, medical facilities, and medical supply companies may overcharge for services.

    Medicare abuse also occurs when providers overuse services by making more visits, ordering more tests, and prescribing unnecessary medications.

  • What are examples of Medicaid abuse?

    Medicare and Medicaid are both federally funded. It is illegal to target any program for personal gain. Medicaid abuse occurs when an individual, group, or agency inadvertently increases the cost of the program. As with Medicare, the most common abuses are overuse and overbilling of services.