This week, I'd like to write about a problem that costs taxpayers billions of dollars each year - Medicare fraud and abuse. Medicare paid out $549 billion in payments for services and medications in 2011. The Office of Management and Budget (OMB) reports that 8.6 percent or $28.8 billion of those payments were "improper," meaning the services were not necessary, did not meet Medicare guidelines, or were downright fraudulent.

Medicare fraud refers to individuals or companies who obtain payments from Medicare under false or illegal pretenses. The OMB has been making a concerted effort to limit Medicare fraud, but Medicare is an easy target since it is such a complex program. It's like playing the lottery for those who are intent on defrauding the government but with a much higher chance of success.

There are three major categories of Medicare fraud: phantom billing, false patient billing, and upcoding/upbilling.

Phantom billing involves a provider billing Medicare for services or procedures that were not necessary or were never provided. Billing for medical equipment falls under this category. I see this type of fraud frequently when companies bill Medicare for equipment or services for my patients that they never requested or that I did not prescribe.

The most common thing I see is medical equipment companies (usually based in Florida) calling my patients at home to offer a service, then fishing for information from the patient in order to provide another service. I still have not figured out how these companies obtain my patients' telephone numbers.

For example, my patient may have diabetes. The company calls the patient, offering to provide diabetes supplies that can be billed to Medicare. The agent of the company may then ask questions such as, "Do you suffer from back pain?" The patient frequently answers "yes" (since most older people suffer from back pain) and thinks nothing of it.

The equipment company then faxes a certificate of medical necessity to me asking me to approve the diabetic supplies (appropriate) and a heating pad for the patient's back pain. These pads, when billed to Medicare, may cost hundreds of dollars when a $17 pad from Wal-Mart would do the same thing. The equipment providers are counting on busy physicians to just sign the form and not investigate if their patients actually requested or need these items. If the doctor investigates and refuses to sign, the company will often continue to fax requests or call the physician badgering him to approve the service.

The second category of fraud is false patient billing. This involves providers billing for services that were never provided or that were not necessary. Sometimes Medicare patients will even participate in this scam by receiving monetary kickbacks from companies for providing their Medicare numbers so the companies can bill for services that were never performed.

The last major fraud category is upcoding or upbilling. This occurs when a provider of services uses a billing code that will result in a higher payment from Medicare for the service provided or may lead to the need for additional services.

So, what should you do if you suspect Medicare fraud? If it's a billing issue from your doctor's office or hospital, it's best to check with the billing office first. It's not unusual, due to the complexity of the Medicare rules, to make occasional billing mistakes. If you note a repeating pattern of inappropriate billing, you should contact the Medicare company that paid the claim. The contact information should be on the Medicare Summary Notice (MSN). You can also contact the Medicare fraud hotline at 1-800-HHS-TIPS or e-mail

If a company contacts you to offer services, make sure you ask them specifically what the services are and always get the name of the company and specific contact information for the person calling you: full name, complete address and telephone number. Don't answer any questions that are not directly related to your primary medical problem. You may want to give your doctor a heads up to be looking for a request for approval for services that you requested.

You can find more information on Medicare fraud reporting at

Dr. John Roberts, an owner of The Paper of Montgomery County and a Crawfordsville physician, writes a daily Health Tip for page A1.