Medicaid is a federal, state and local assistance program that helps pay medical costs for low-income individuals who are eligible. Medicaid fraud affects everyone from the taxpayers, to the states, to the individuals that need Medicaid, and occurs through a number of schemes including, but not limited to:
- Providers billing for services not provided
- Providers falsifying credentials
- Pharmacies substituting generic drugs, but billing Medicaid for name-brand
- Identity theft of individuals
- Identity theft of providers
How is Fraud Perpetrated by the Humbug Gang
The Humbug Gang committed Medicaid fraud in 2001, when it stole the identities of thousands of individuals and doctors licensed to provide care, leaving people without access to the benefits they needed and the government more than $150 million in debt. On top of stealing identities to gain fraudulent access, other members of the group leased office space, opened fake clinics, opened bank accounts in names of the doctor’s whose identity they stole, and then submitted applications to become Medicaid providers. Once obtaining clearance to provide these services, the criminals would bill for services never provided, using the information of stolen beneficiaries. Once the money was deposited by Medicaid, the fraudsters would withdraw it, launder it, and sometimes even send it overseas to their counterparts. Once all was said and done they had opened up nearly 115 “clinics,” and stolen more than $150 million.
How is fraud perpetuated by the Deceit Family
Sally loves being a doctor. She loves helping people, curing people, and most of all – the money. But, once she got used to the lavish lifestyle she’d be living as a doctor, she couldn’t stop, and continued to spend more and more until she was in financial trouble. The first thought in Sally’s mind, being a Deceit, was to defraud the government. Besides, nobody really expects doctors to be the bad guys, so nobody would ever find her – right? Sally, who is licensed to provide medical care under the Medicaid program in Fraudia, decided to take advantage of her position. She began claiming that she was working in two places simultaneously, and billing for services she didn’t provide – or places she didn’t even visit. In doing this, Sally earned an extra $100,000 a year on top of her current salary, and could go back to taking the extravagant vacations she was just getting accustomed to.
How the government can prevent it
Using an identity-based approach, Dolus will soon be able to catch criminals who attempt pass as either Medicaid providers or recipients – before funds are issued. To stop both individuals and organized crime groups from committing Medicaid fraud, the government will use data analytics and government record databases to recognize inconsistencies and faults in reported data. Fraudia plans to use this approach at the time individuals are certified or recertified as Medicaid providers and recipients. If the data indicates that the identity is suspicious during the verification and authentication process, the matter will be investigated further. As a result, Fraudia expects to detect and prevent fraud up front, instead of engaging in a pay and chase scenario.