Health Care Reform Fraud

IdentityTheft — Sun, 13 Jun 2010 07:01:00 GMT

Identity thieves have already begun to exploit provisions in the health care reform bill aimed at closing the Medicare “donut hole”

One provision of the health care reform bill is to start closing the Medicare “donut hole” - the coverage gap that many seniors have in their prescription drug coverage.

What exactly is the “donut hole?”

For seniors who must take expensive prescription drugs, or a combination of many drugs that add up to a large expense, Medicare rules state that they must pay the first $310 worth of drugs (the deductible), and then Medicare pays for the next $2,520 with only a small copay paid by the consumer. Once the total cost of $2,830 (the deductible plus the $2,520) is reached, they become responsible for 100% of the cost of their drugs until their total drug cost reaches $4,550. Once that total is reached, Medicare picks up the cost of the drugs they need for the rest of the year, minus the co-pay.

The $1,720 coverage gap is called the Medicare “donut hole.”

As part of the health care reform legislation passed in March of this year, $250 checks have begun going out to those who have already begun paying the total cost of their drugs due to this coverage gap. The amount of the Federal payments will increase each year – until 2020, when the gap will cease to exist.

The government keeps track through its drug usage database of how much Medicare beneficiaries have already spent on their drugs, and as such, it knows exactly the point when the senior has reached the coverage gap. Once a senior has reached the gap in coverage, a check is sent without the consumer having to do anything at all.

Unfortunately, seniors have long been the target of crooks and frauds. Here are some of the ways criminals are mis-using this program, as well as some suggestions about how to prevent the crime:

Phone calls: Someone pretending to work for the government or an aid agency calls with an offer to help the consumer “apply” for the $250 check.

Home visits: Someone comes to your door asking for information in order to "verify that you are eligible" to receive the reimbursement check. You may be asked to provide your social security number, bank account numbers or other personal data - which can result in fraudulent bank transactions or identity theft.

Internet pop up ads: Ads inviting you to fill out an application for your rebate check may “pop up” on some websites.

No doubt there are additional ways that criminals will think of to steal the money. If you are a senior or receive Medicaid drug coverage, you will automatically receive your check at the right time, and there is no information you need to provide, and nothing you need to do to get it.
If you know someone who is likely to get a check – advise them to ignore such scams.
If you or someone you know is contacted by scammers attempting to gain your personal information, report this fraud by calling 1-800-MEDICARE or by going on line to www.stopmedicarefraud.gov.

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Health Care Reform Fraud