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3

Revised:  5



Red Flags: Identifying Medicare Part C and D Fraud Fraud Type

Example

Enrollment issues:

Enrolling beneficiary without their knowledge or consent

Involving agents and brokers

Offering beneficiaries a cash payment as an inducement to enroll in a Medicare-sponsored plan.

Red Flags

Misrepresenting the product being marketed as an approved Medicare-sponsored plan when it is actually something else (e.g., telling the enrollee they are being enrolled in one Part D plan, but actually enrolling them in a different, most likely more expensive plan) Requiring beneficiaries to pay up-front premiums: The 299 scheme promised enrollees they could sign up for or renew their Part D coverage for an up-front $299 that would cover premiums for the next year or for the person's lifetime Involving pharmacies

Inappropriate billing which can include: billing for nonexistent prescriptions; billing for brand when generics are dispensed; billing for non-covered prescriptions as covered items; billing for prescriptions that are never picked up (e.g., not reversing claims that are processed when prescriptions are filled but never picked up)

• Handwritten claims • Calls from enrollees

Prescription drug shorting: Pharmacist provides less than the prescribed quantity and intentionally does not inform the patient or make arrangements to provide the balance but bills for the fullyprescribed amount Involving prescribing physicians

Script mills: Provider writes prescriptions for drugs that are not medically necessary and often for patients that are not theirs; such scripts are usually written and most likely involve narcotic prescriptions Theft of prescriber's DEA number or prescription pad: Prescription pads and/or DEA numbers can be stolen from prescribers; this information could illegally be used to write prescriptions for controlled substances or other medications

Involving a Part D enrollee

Prescription forging or altering: Someone alters prescriptions other than the prescriber or pharmacist without prescriber approval in order to increase the quantity or number of refills Prescription diversion and inappropriate use: An enrollee obtains prescription drugs from a provider, possibly for a condition from which they do not suffer, and gives or sells this medication to someone else Enrollee falsely reports loss or theft of drugs or feigns illness to obtain drugs for resale on the black market

Geographic and Service Considerations

 Physicians call to report suspect activity with regard to prescriptions issued using their DEA number

 Enrollee has a large number of narcotic prescriptions from many different prescribing physicians, and the enrollee uses several pharmacies to have those scripts filled. This may indicate that the member is involved in doctor shopping to obtain scripts.

Doctor shopping: Beneficiary or other individual consults a number of doctors for the purpose of inappropriately obtaining multiple prescriptions for narcotic painkillers or other drugs; might be indicative of an underlying scheme, such as selling prescriptions

 Handwritten claims

CMS has identified the following counties as high-risk geographies: Harris County, TX, Kings County, NY, Los Angeles County, CA, and Broward and Miami-Dade Counties, FL.

 Claims from high-risk geographies for high-risk services.

CMS has also identified the following as high-risk services: durable medical equipment (DME), infusion, home health, and independent diagnostic testing facilities, which are primarily processed and paid for under the Medicare Part C (medical) benefits of the Medicare Advantage Plans.

4 

Revised: February 15, 2011 



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