Medicare Fraud Carries Heavy Price Tag for Scammed Patients

By John Commins

New research shows that Medicare fraud and abuse costs more than wasted tax dollars.

Johns Hopkins researchers estimate that Medicare fee-for-service patients treated by clinicians who later are banned from the federal healthcare program for fraud were as much as 17% more likely to die than patients treated by non-excluded clinicians.

In 2013, that fraud and abuse contributed to 6,700 premature deaths, and study lead author Lauren Nicholas says that number is a low-ball estimate because it does not factor in other government-sponsored health insurance, commercial health insurance or the uninsured.

“The biggest take home message for us was the extent to which fraud and abuse should really be thought of not only is a financial problem, but as a public health challenge,” says Nicholas, an assistant professor in the Johns Hopkins Bloomberg School’s Department of Health Policy and Management.

The findings were published this week in JAMA Internal Medicine.

The study also found that patients treated by later-banned providers were 11% to 30% more likely to experience an emergency hospitalization within a year.

Nicholas says the higher mortality rates of patients of later-banned clinicians are “directly related to the crimes that these perpetrators are committing in order to bill Medicare for additional revenue.”

“A lot of these perpetrators do things like illegally disseminate dangerous drugs. There are cases where they’re doing medically contraindicated surgery because surgery is a lucrative thing to bill for, or they’re using fraudulent make-your-own chemotherapy,” she says. “It’s hard to believe some of the things that people will do to be able to bill for it, and these things are incredibly dangerous for the patients who then get exposed to it.”

“We found that even a single visit with a provider later excluded for fraud and abuse increased the risk of dying compared to someone who lived in the same county and had the same health status but did not see an excluded provider,” Nicholas says.

In the analysis, the Johns Hopkins researchers looked at providers banned from Medicare for fraud and abuse by the Department of Health and Human Services’ Office of the Inspector General between 2012 and 2018.

The researchers linked the banned providers to a random sample of the Medicare patients treated by excluded providers.

The study sample included 8,204 Medicare FFS patients who were first treated by a provider later banned for fraud and abuse in 2013 and a comparison group of 296,298 patients treated by a randomly selected provider who had not been banned for fraud and abuse.

Before the fraud exposure, the two groups were in similar health. Nicholas and her colleagues followed patients for up to three years to identify differences in mortality and hospitalization.

Nearly one-quarter—23%—of patients seen by banned providers were non-white while 16.5% of patients treated by non-excluded providers were non-white.

Patients treated by banned providers were more likely to be disabled, (27.2% vs. 18.6%) and dually enrolled in Medicare and Medicaid, (34.7% vs. 21.9%).

More than 47,000 clinicians have been banned from Medicare and Medicaid, and the fraud and abuse associated with the program costs as much as $140 billion a year.

A further breakdown of the patient-clinician mix shows that 60% of patients in the sample were treated by providers committing fraud. Of those patients, 14% were treated by providers who had committed patient harm, and 24% were treated by providers practicing with a revoked license.

Providers excluded for fraud had the highest mortality rate. Their patients were 17.3% more likely to die than patients not treated by a banned provider.

Patients treated by providers banned for patient harm were 13.7% more likely to die, and patients who were treated by providers banned for revoked licenses were 14.8% more likely to die.

John Commins is a content specialist and online news editor for HealthLeaders, a Simplify Compliance brand.