Medicare Recipients Targeted by Rising ‘Phantom Billing’ Scam

Medicare Recipients Targeted by Rising ‘Phantom Billing’ Scam
Cover Image Source: Healthcare frauds on the rise (representative image) | Unsplash | Photo by Online Marketing

Medicare recipients in Indiana are falling victim to a concerning trend known as "phantom billing," where fraudulent charges are billed to Medicare without the knowledge or consent of the beneficiaries. The scam which involves billing for medical supplies such as urinary catheters that were never ordered or used by the recipients is costing taxpayers millions of dollars and threatens to increase premiums for Medicare members in the future, per WRTV.

Unsplash | Photo by National Cancer Institute
Medicare scams costing taxpayers millions of dollars (representative image) | Unsplash | Photo by National Cancer Institute

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Ann Midkiff of Indianapolis recently discovered over $3,000 worth of urinary catheters billed to Medicare using her Medicare number despite never having used or ordered them. Similarly, Nancy Moore, another Medicare member found unauthorized charges on her Medicare statements, totaling around $3,000 for urinary catheters she never received or requested.

The problem, sometimes referred to as "phantom billing," is on the rise, according to Moore, who also serves as the director of the Indiana Senior Medicare Patrol. The organization, funded by the U.S. Department of Health and Human Services, aims to prevent healthcare fraud and has been inundated with complaints regarding fraudulent billing practices. WRTV Investigates contacted the supplier listed on Midkiff's Medicare statement but received no response. The lack of accountability raises concerns about the prevalence of fraudulent billing practices and the potential financial burden on taxpayers.

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A recent report by the National Association of Accountable Care Organizations and the Institute for Accountable Care highlights the alarming increase in Medicare payments for catheters, from $153 million in 2021 to a staggering $2.1 billion in 2023. The analysis also revealed a significant spike in the number of patients billed for catheters, indicating widespread fraudulent activity in the healthcare system.

Unsplash | Photo by National Cancer Institute
Fraudulent activity in the healthcare system is on the rise (representative image) | Unsplash | Photo by National Cancer Institute

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Clif Gaus, president and CEO of the National Association of ACOs, emphasized the importance of addressing this issue to protect the integrity of the Medicare program. The surge in fraudulent billings, primarily attributed to newly established durable medical equipment (DME) suppliers, underscores the urgency of implementing measures to combat healthcare fraud and abuse.

The Federal Trade Commission estimates that fraud, mistakes, and abuse cost Medicare approximately $60 billion annually, highlighting the need for comprehensive strategies to safeguard taxpayer funds and ensure the efficient operation of the healthcare system. In response to inquiries about the federal government's efforts to address phantom billing, the Centers for Medicare and Medicaid Services (CMS) refrained from confirming ongoing investigations but assured that actions are being taken behind the scenes to combat fraud.

Medicare recipients are advised to scrutinize their statements and report any unauthorized charges or suspicious activity to Medicare. Both Midkiff and Moore took proactive steps to address the fraudulent charges by contacting Medicare and obtaining new Medicare numbers and cards.

U.S. Senator Mike Braun has initiated efforts to address phantom billing, including requesting an audit by the General Accounting Office and introducing legislation, the Medicare Transaction Fraud Prevention Act which is aimed at enhancing oversight of Medicare-covered purchases of medical equipment.

As investigations into phantom billing continue, the need for heightened vigilance and robust measures to combat healthcare fraud remains paramount. Medicare beneficiaries are urged to report any fraudulent activity to Senior Medicare Patrol and remain vigilant in safeguarding their personal information and healthcare benefits.


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