Michigan: Fraud and abuse of medicare and medicaid - Research Paper Example

Medicare is a program for social insurance, serving over forty four million people at a cost of approximately $432 million as of 2012. Together, the two programs are representative of 25% of the total US federal government’s budget (Holt, 2012). The state of Michigan has designated Medicaid and Medicare as programs of high risk. This is because these programs have especially high risk of abuse, waste, and fraud, as well as improper payment (Holt, 2012). These improper payments are inclusive of making incorrect payment accounts or making payments that ought not to have been made.

In part, Medicare is particularly high risk since it is complex and susceptible to wrong payments; on the other hand, Medicaid is high risk because of issues with the fiscal oversight’s adequacy with regards to the prevention of inappropriate spending. The Centers for Medicare and Medicaid Services, or CMS, in 2012, estimated that, in different states including Michigan, both programs lost more than $70 billion as improper payments. Michigan has sought to implement recommendations and laws that could aid CMS to attain strategies aimed at reducing improper payments, abuse, waste, and fraud in Medicaid and Medicare (Holt, 2012).

There are several means of fraud or abuse in the use of Medicare and Medicaid. . In addition, the falsification of cost reports and giving or receiving gifts, cash, or items of value in return for getting the services are also examples of fraud. Abuse and fraud of these programs can also occur when someone forges prescription papers, lies with regards to their eligibility, lies about the medical condition, gives out their card for the service to someone else, or sells prescription drugs given to them to others.

Finally, it can happen in the event that the provider charges falsely for telephoned services, missed appointments, and unnecessary medical tests (Holt, 2012). One recent example of fraud involved Babubhai Patel in the Detroit area who was in control of over twenty pharmacies in Michigan who conspired, with health practitioners, to bill the federal government illegally for prescriptions amounting to millions (Holt, 2012). The amount of this fraud events and abuse has created urgency for the state and CMS to implement recommendations by US Government Accountability Office and laws that have been recently enacted to aid in the reduction of improper payments, abuse, and fraud in Medicaid and Medicare.

One way to counter this fraud and abuse is through the strengthening of procedures and standards for provider enrolment. Strengthening these procedures and services could aid in the reduction of risks from entities enrolling, with an intention, to defraud the two programs (Holt, 2012). The PPACA, or Patient protection and Affordable care Act amended various aspects of Medicaid and Medicare provider enrollment. The state of Michigan has taken to implementing the provisions that are inclusive of designation of providers through the provision of increased stringent reviews and by risk levels