Is Medicare/Medicaid fraud, waste, and abuse illegal?

The Centers for Medicare and Medicaid Services (CMS) provides a clear and concise explanation of the distinctions between fraud, waste, and abuse in the context of healthcare benefit programs such as Medicare and Medicaid. Let's summarize the definitions they provide:

Fraud:

• Definition: Knowingly deceiving, concealing, or misrepresenting to obtain money or property from any health care benefit program.

• Nature: Considered a criminal act.

• Example: Falsifying claims, submitting claims for services not provided, or using someone else's Medicare or Medicaid card to obtain services.

Waste:

• Definition: Overusing services or engaging in other practices that directly or indirectly result in unnecessary costs to any health care benefit program.

• Nature: Involves unnecessary costs but may not necessarily involve criminal intent.

• Examples: Conducting excessive office visits, prescribing more medications than necessary, or ordering unnecessary laboratory tests.

Abuse:

• Definition: Health care providers or suppliers performing actions that directly or indirectly result in unnecessary costs to any health care benefit program. It includes practices that don't provide patients with medically necessary services or fail to meet professionally recognized standards.

• Nature: Involves actions that may not meet professional standards but may not necessarily involve intentional deception.

• Examples: Billing for services that aren't medically necessary, overcharging for services or supplies, or misusing billing codes to increase reimbursement.

The key differentiators among fraud, waste, and abuse lie in the intent of the person committing the act, their knowledge of the situation, and the specific circumstances involved. While fraud involves intentional deception, waste and abuse may involve unnecessary costs or actions that deviate from professional standards without necessarily being criminal in nature. Understanding these distinctions is crucial for effectively addressing and preventing these issues in healthcare benefit programs.