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Medicare – Don’t Be Confused, Don’t Be Abused

Medicare – Don’t Be Confused, Don’t Be Abused

For our readers who are Medicare members, are soon-to-be Medicare eligible, or who have relatives or clients who are members, read on to understand how to protect this very valuable and very tax-payer funded benefit.

Medicare is in the process of mailing new ID cards to its 60 million (yes, 60 million) members. The new card, which is free, is designed to eliminate the potential for fraud by replacing a member’s Social Security number with a Medicare number, consisting of a combination of 11 total numbers and letters, which is unique to each member. This replacement process began in May of 2018.

Here is an example of the new card design:

Ironically, the new cards themselves are presenting an opportunity for fraud. According to an AARP survey, 60% of those surveyed thought that a fee had to be paid in order to obtain the card. This confusion becomes the set up for scams. In one version, fraudsters pose as representatives of Medicare and demand a processing fee for the new card. In a second version, fraudsters tell members that they are eligible for a “refund” on their old card and, oh by the way, we need your bank account information in order to process that refund.

The new card scam is not the only financial abuse that plagues Medicare and Medicare members. Witness:

  • Medical identity theft: your Medicare number is stolen in order to secure treatment, drugs, or devices.
  • Upcharging: Medicare is billed for a more expensive treatment or device than you received.
  • Phantom billing: Medicare is billed for services that were not delivered.
  • Double dipping: Medicare receives duplicate claims for the same procedure.
  • Prescription fraud: your Medicare number is used to fill bogus prescriptions, with the drugs being sold on the black market.
  • Fake freebies: you are persuaded to agree to services and/or devices that you do not need, on the assertion that they are free to you, with Medicare footing the bill.

This financial abuse has both a systemic and individual impact. The Government estimates that, each year, 10% of Medicare payments are stolen or misdirected. That’s an estimated $600,000,000, and some experts believe that it could be up to 20% or 30% that is stolen. Of course, all taxpayers foot the bill for this abuse, but Medicare members suffer the impact of this abuse through higher deductibles, higher co-pays, and service cuts.

On an individual basis, if your Medicare number is used in any of the fraudulent schemes noted above, you could become ensnared in serious legal actions. Even as you work to disentangle yourself from a fraudulent billing con, future medical treatment and your credit score could be jeopardized.

In order to protect yourself, here are steps that you can take:

  • Make a copy of your new Medicare card for your personal records and store it in a secure place.
  • Carry the new card on your person and shred the old card.
  • Review your explanation of benefits from Medicare.

If you think you may have been a victim of fraud, here are some resources for more information:

  • Medicare Hotline: 800-633-4227
  • Medicare Fraud Line: 800-447-8477
  • For Medicare Part D (Rx) issues, call: 877-772-3379
  • Check out AARP’s Fraud Watch Network

Gregory Aloia

Greg Aloia is a financial advisor with Abacus Wealth Partners.

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