Retired OIG Special Agent and Advize’s Director of Litigation & FWA Support will be stepping in each week to examine current fraud trends from the lens of an investigator. Stay tuned for weekly insights, updates, and information on healthcare’s most expensive crimes.

Several weeks ago, I wrote a blog post about a case that I worked just prior to retiring, about a sales representative for a DNA testing lab who preyed upon seniors. The representative used a sham not-for-profit as his way to get into apartment buildings and do presentations all about free and low-cost services available to the seniors.  The representative was in fact using this sham not-for-profit to tout the DNA test he was pushing, earning a commission on each swab that he obtained.

In a recent CBS News article, the continuation of the scam was discussed.  When I read the article, I, as most of you should be, became enraged.  It is no longer the fraud that angers me; I became jaded about that years ago after constant exposure to the entire fraud continuum.  I was more enraged at the fact that seniors who may need an actual procedure, item, or service are essentially being locked out of being able to receive the services they need as a result. The DNA test in question is a “one and done” test, meaning that once it is billed and paid for by the Medicare program, it is no longer a billable event.  So, what happens if a few years down the line, the Medicare beneficiary truly needs the test, or has an actual order from their provider to obtain the test, and is rejected because some unscrupulous sales representative/lab has already caused that false claim to be paid?

As far as I can ascertain, getting the program to pay for the test a second time will be an uphill battle.  This situation is not isolated to DNA testing. Physical therapy has yearly limits as well.  In many instances, we have all heard of providers who bill for services that were never rendered.  In a normal situation, such as an evaluation and management service or a service connected to an office visit, that does not necessarily have a negative effect on future medical care for a patient.  In a situation with service limits (as with physical and occupational therapy), it can be disastrous.

Consider this: a Medicare beneficiary has an issue requiring physical or occupational therapy in the middle of the calendar year.  Prior to needing the services, the Medicare beneficiary never sought therapy that calendar year.  Now, this Medicare beneficiary needs the services, gets the prescription for the services from their provider, and seeks to obtain the therapy.  Due to a variety of reasons (medical identity theft, billing for services previously not rendered, etc.), this Medicare beneficiary is now stuck with a situation that will surely not be resolved quickly.

With the recent move from the Healthcare Identification Number (HICN), which was traditionally a social security number with a suffix at the end to denote the type of beneficiary, to the Medicare Beneficiary Number (MBI), hopefully medical identity theft will be reduced (although I think this is the glass is half-full part of me speaking).  Unfortunately, the manner and means by which identities are stolen will continue, so the theft of the MBI will continue as well.  Since the MBI is no longer tied to a social security number, it in theory is much easier to issue a new MBI when a compromise is identified.

The larger problem is this:  A Medicare beneficiary gets his wallet stolen and files a police report.  What are the chances that the local police officer knows to contact CMS/HHS-OIG, and report that theft to have it added to the compromised beneficiary list?  The OIG and CMS have worked very hard to work on public outreach (television and print advertisements) to remind seniors about keeping their MBI safe and about not sharing information.  Unfortunately, the senior population is still very much at risk.  It will take several generations to get to a point where seniors are technologically savvy enough to understand the various ways identities are compromised in this digital age.

As I look back on my career, I really was never bother by the fraud that was committed; it was always that the people who were taken advantage of were the most vulnerable and did not even know they were the victims.

Advize Health LLC is a healthcare advisory and consulting company that provides a breadth of healthcare industry services in the payer, provider, and legal communities. Contact Eric Rubenstein for more information on our Fraud Spotlight series.