Notes to State Offices:

This is a presentation that should take about 30-40 minutes for staff or lead volunteersto use.You should adapt the Welcome slide to fit your event’s circumstances.

You may want to replace slides 11-17 with state-specific headlines or press releasesabout cases in your state. Of cut to a couple of examples if you need to save time.

Note on slide 27 you will want to include the contact information for the specific stateagencies

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Welcome to this discussion of the “Health Care Scams and Frauds.”

We are glad you could join us today.•Thank co-sponsors•Introduce guests•Introduce presenters

You undoubtedly have heard about the problem of fraud in the health care system, aswell as scams that are cropping up. Scam artists are already taking advantage ofuncertainties about the new law to try to rip you off.

Today we are planning on talking about both scams that could be targeting you andfraud that is taking place within the entire health care system, including fraudulentactivities aimed at Medicare, Medicaid, and insurance companies.

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How big is the problem of health care fraud? Waste, fraud and abuse appear in all segments ofthe health care system and in all areas of the country.

The way the heath care system is designed makes it particularly vulnerable to fraud and thatactivity is particularly difficult to control.

Why? Most health care providers are paid based on a set fee for a specific service through ahighly automated claims processing system.

Billions of annual claims are paid to hundreds of thousands of providers by more than a 1000payers. Mistakes can happen, but intentional fraud happens, too.

In a 2009 report the Government Accountability Office estimated that approximately 10% of allhealth care spending – or about $100 Billion -- came from fraud and abuse.

The Centers for Medicare and Medicaid Services estimates that we—all those who have paidinto the Medicare trust funds all our lives—are losing about $65 billion to criminal fraud eachyear.

$65 billion in Medicare fraud would go a long way to extend the security of the Medicareprogram and even add more benefits.

Health care fraud can also mean that people get stuck with bad equipment, they are given thewrong drugs, they get inappropriate or untimely care – all affecting their health and well-being.

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During today’s presentation [our AARP consumer experts] are going to talk to you aboutwhat you can do to spot and stop scams and frauds.

We’ll point out to you what the new scams look or sound like so you can avoid gettingtaken.

We’ll also let you know what you can do to stop these scams from reaching your friendsand neighbors and how and where to report your concerns.

We will talk about fraud that is happening in the larger health care system.

We’ll help you understand how you can spot possible fraud on your Medicare SummaryNotice or Explanation of Benefits.

You are a necessary participant in the national effort to control fraud by reporting it.We’ll tell you how.

Finally, we will explain some of the measures added in the new health care law tostrengthen enforcement efforts to stop the crime wave.

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Just like they always do, the scam artists read the headlines. They take just a bit of thenews and twist it to their needs. Any time there might be some confusion aboutsomething in the news, it’s just the situation the scammers love to exploit.

Let me explain just a few of the scams we have already seen:•$250 rebate check

•Yes, people who fell into the Medicare Part D prescription drug coverage gap –AKA the doughnut hole—got a check from Medicare. [When your total drug costsexceed a certain amount ($2,930 in 2012), you fall into the doughnut hole. Whilein this coverage gap, you pay the full price of your drugs, as well as yourpremiums. When your out-of-pocket costs for drugs reach a certain level ($4,700in 2012), you qualify for catastrophic coverage. After you qualify for catastrophiccoverage, you are responsible for only 5% of your prescription drug costs for therest of the year.]•Send automatically to those who were eligible•No one had to apply, request, give information, pay fee get help•Nothing anyone could do to get the check quicker• But, we saw reports that people were calling offering to “help you get yourcheck”• It was a scam.

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The other major way we are hearing about scams are sellers of what they may be calling“new” insurance who are building a sales pitch around a bit of the health care lawprograms .Yes, some new insurance programs are or will be available under the new law• One new program is the Temporary insurance for persons with pre-existing conditionsthat some refer to as “high risk pools”. This new coverage for this special group ofpeople who have been without insurance for at least 6 months and have a pre-existingcondition is now available.• But no government rep will come door-to-door or call you on the phone or send youan email to offer this temporary insurance

•Another new program is the extension of coverage for young adults so families can addyoung adult children to existing health care plans.•But there are no separate young adult policies created by the new law•Some out there are trying to sell “young adult policies” as if they were what the lawcreated but they are not

• Another new program is the state-base health insurance exchanges—where you will beable to purchase private insurance at less costly group rates• But they do not come into operation until 2014• No one can be selling this insurance at this early date

• Medicare coverage—yes, there are improved benefits within Medicare• But watch out for insurance agents claiming “you have been pre-approved under thehealth care law for the new Medicare supplemental insurance”.• This scam has been tried across the country. These agents are fraudulently usinguncertainty about the health care law to promote their insurance product that doesn’t

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have anything to do with the law.

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Other warning signs you should watch out for:

We’ve also heard reports that people have tried to use the health care law to steal your identity.How is that supposed to work?

I’ve got 3 examples:

Some AARP members report that they got a call telling them that because of the changes toMedicare, they “need” a new Medicare card. They were asked for their Medicare number(which is also your Social Security number), name, address, so they could get a replacementcard.

There is absolutely no truth to this scam. You don’t need a new Medicare card no matter howconvincing they may sound. They are just using the news headlines to sound a tiny bit legitimateas they try to convince someone to give away personal information.

Another report is of a late night television ad with an 800 number to call. The pitch is for a“limited enrollment opportunity” to sign up for new insurance “now that the historic health carelegislation has passed.” Whatever insurance they might be selling—it has nothing to do with theAffordable Care Act.

You can expect to see some post cards coming in the mail to you offering “free information”about the changes brought about by the health care law. It might look like the card is sent froma federal agency with a DC post office box for a “Federal Processing Center.” They want you togive your name, age, Social Security Number, and address. While you just might get some freeinformation, what you’ll surely get if you return the card is a sales call for annuities, investments,or other types of life insurance that has nothing to do with the heath care law.

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Government officials aren’t going to be calling you on the phone or coming to your door or even sending youpromotional emails

And they aren’t going to be advertising on late night TV

So how can you tell the bad from the good or the legitimate information about new programs versus the look-alikes?

The fraudsters are going to try to make you think they are “official”—with seals, and DC addresses, or even by comingout and saying they are with “the government”.

Slow down• Any time someone uses the “limited time only” short deadline to get you to act, they are trying to push you quicklyinto an ill advised decision.•Watch out for people who are trying to get you to sign before you can think things through and verify.• You will get plenty of time to think about any decisions you do have to make about

• Medicare Open Enrollment• Medicare Advantage plans• Part D prescription drug plans• Temporary insurance for people with pre-existing conditions• Exchanges—what don’t come about until 2014.

Which leads to the next point:

Verify the information• if someone calls, ask for information in writing• if you get an email, don’t follow the link or open attachments until you independently verify that thesender is legitimate• if they ask for personal information (name, address, Social Security number or Medicare number, bankaccount, credit card), ask why they want it• go directly to a trusted source of information such as AARP or Medicare – we will give you lots of places togo in just a moment

Any person selling any kind of insurance has to be licensed in your state. Check with the insurance department in yourstate to find out if any agent is licensed. If not, don’t do business with that person.

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Law enforcement wants and NEEDS you to report your concerns about scams.They can’t investigate, can’t take steps to shut down an illegal operation if they don’thear from you

No one place to report.Best place to report might depend on what the scam is about.But don’t be reluctant to report out of concern for not knowing the “right” place

Places you can report are your state insurance department, your state attorney general,Medicare if it’s about Medicare insurance, the fraud department of your privateinsurance provider, even your local police department. [You will find all those telephonenumbers in just a moment.]

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A place to get answers to questions about your insurance are the SHIP programs—StateHealth Insurance Counseling and Assistance Programs--those are trained volunteers whocan answer your questions about Medicare and other insurance.

Medicare.gov has general information about Medicare and the new www.healthcare.govis another place to go for answers to questions about the new health care law.

And AARP’s www.aarp.org/getthefacts is a good source for information on the newhealth care law

I’ve been talking about scams. Let’s now shift our focus to the broader issue of healthcare fraud.

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You might be wondering what the difference is between “scams” and “fraud”. There really is no precise definition, but in generalscams target YOU—the consumer of health care– and fraud targets the health care system. When we talk about health care fraudwe are generally talking about all the ways that people try to get money when they are not entitled to it from Medicare, Medicaid,insurance companies, and legitimate providers of health care services. These fraudsters – whether an individual or an organizedgroup -- file false claims for money hoping to get rich, stealing money that otherwise would go to pay for health care services youneed. You’ve heard the old saying from Willy Sutton? When asked why he stole from banks, his response was, “because that’swhere the money is.” Well, there’s a LOT of money in health care.

Now, there are a number of ways to rip off the system, but two prominent ways that you should be aware of are what we call “up-coding” and “undelivered services.”

First, Let’s talk about the practice of “up-coding.”

Whether you are on Medicare, Medicaid or have private insurance, when you go to a doctor or a clinic or a hospital or even apharmacy, you or the provider files a written claim asking to be paid. That claim has a code which indicates what service wasprovided and how much money the provider is to receive. When the provider “up-codes” they are deliberately and falsely reportingwhat services you received and how much money they are due. Instead of coding a visit as “routine”, the provider might code it as a“lengthy” visit. Or instead of coding the treatment for pneumonia as “simple”, it might be coded as “complex” thus “upcoding” theclaim and therefore making more money from it.

Now, as for “undelivered services” – this happens when the provider may not have provided any service to you at all and is due nomoney, but still files a claim. Additionally, they may misreport costs or other information to increase payments. It’s all about themoney.

And there are other ways that fraud happens. People doing these schemes can range from street criminals to organized crime suchas the Russian mafia to legitimate companies that pay kickbacks to physicians or nurses in return for referrals. A “kickback” is payinganother provider for a patient referral or paying a patient to seek Medicare services for phantom symptoms. They may set up shamstorefronts to supply durable medical equipment to appear to be legitimate, fraudulent bill for millions of dollars, then close upshop and reopen in a new location under a new name.

Even more serious is when the provider intentionally orders or delivers medical care or health care supplies a patient doesn’t need.

Now, I am going to share with you some real life examples of how this has worked. These are actual cases from State Medicare andMedicaid Fraud Units just between February and June of 2010.

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New York Attorney General Cuomo brought this case against what are called “flyerboys”.

These are people who are paid to get people to come to a clinic. The so-called patientsdon’t actually get treatment. They ay even get cash or gifts—such as CD players or giftcertificates—just for giving over their Medicaid or Medicare number.

The more people the flyer boys bring into the clinic the more they are paid—and themore that Medicaid or Medicare gets billed—for treatments the patients don’t need ordon’t receive.

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This case comes out of the Nevada Attorney General’s office. This was an investigationinto a personal care program, where someone goes into a patient’s home to help themwith bathing, dressing, housecleaning, etc. The home care agency employee claimedthat she was doing work when she never showed up.

She got caught. She received a suspended 60 day jail sentence, 120 hours communityservice, and has to pay back the government $15,000.

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This case comes out of New Jersey and involves a pharmacist who plead guilty tosubmitting false claims for payment for drugs.

The pharmacist accepted fake prescriptions from undercover detectives as payment fornarcotic prescription drugs. Although he never filled the prescriptions, he submittedclaims to Medicaid as if he had.

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A full time Connecticut employee got paid by the CT department of developmentalservices for doing his job as a licensed clinical social worker. He also submitted claims toMedicaid for the same services as if he were in private practice.He got caught with the double-dipping scheme where he tried to get paid by Medicaidfor the same time and services he was providing as a state employee.

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In New Mexico, some people work really, really long days. But this individual billed thestate for 54 hours of counseling in a single day. She’s now been indicted along with 2others in this fraud scheme.

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In North Carolina, fraud investigators discovered that an office manager for a medicaltransportation company falsified trip records to make it appear that the patients neededto be transported by ambulance rather than have routine van transportation. Of course,a trip by ambulance is more expensive than one by van.

In total the company falsely billed to the tune of more than $650,000. That money hasto be paid back as restitution. Plus the office manager is going to jail for the next 4 years.

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So we have seen pharmacists, home health agencies, social workers, transportationservices all getting caught for fraudulently billing for services they didn’t provide. Wehave one more, this is a dentist from Joplin, Missouri who billed for x-rays, root canals,and fillings he never did. To support his false claims he cut off portions of actual dentalrecords, and used x-rays from another patient’s file.

How did this dentist’s thievery come to light? A smart citizen reported her suspicions.

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As you can see, there are many different ways criminals can commit health care fraud.Some of the fraud happens behind the scenes and there is no way that you would beable to spot it.

But you can make a big difference if you stay smart and alert about your health care.This means creating a good relationship with your primary doctor and regularlyreviewing your billing statements for any irregularities. You should always understandwhat health care you need and what you are actually getting.

You can make a big different if you are vigilant for anything that doesn’t look right on thecopies of billing statements you receive.

Even though you do not have to pay any money directly out of your pocket, it’s still yourmoney as a taxpayer and a person paying for health care in general. It’s alwaysimportant to be a smart consumer and ensure that your money is spent wisely.

You should also guard your insurance identification information as closely as you guardyour credit card information. Medical identity theft is when someone uses your name orinsurance number to get medical services. It is a big source of health care fraud.

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Now, let’s talk about how to properly read that all important billing statement and whatyou should be looking for.

If you are on Medicare you regularly receive a Medicare Summary Notice. AARP has agreat web page to help you understand your Medicare Summary Notice. Just go towww.aarp.org/healthtools and click on the yellow “decoder” box.

If you have private insurance, you will periodically get a statement from your insurancecompany called an Explanation of Benefits, or EOB.

Whatever it is called—remember it is not actually a bill. Rather it is a notice to you aboutclaims that have been made by providers on your account. You should carefully look atyour statement to make sure there is nothing out of the ordinary.

If you have private insurance your EOB may look different but similar information wouldappear—such as the services provided, the service code, the amount the provider billed,and amount the insurance company approved as reimbursement, and where you wouldcall with questions.

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As you read your billing statement there are 3 basic important questions to ask yourself.

• Are there any charges for something—service, equipment, medications—that youdidn’t get?• Are there charges for services that are not medically necessary?• Were you billed for the same thing more than once?

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If you see anything that you don’t understand, call your provider. It may be a mistakethat can be easily corrected. Or it could be a legitimate consultation with anotherprovider that your doctor sought as part of your treatment. But it may not be.

The best rule of thumb is, if you don’t understand a charge or a claim, ask about it.

If you still have concerns, don’t be afraid to report to the authorities. You can downloada list of where to report by going to the download icon that looks like 3 pieces of paper.

We will also go over where to report in just a minute.

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Besides reading your Medicare statement, there are other things you can do to combathealth care fraud.

Your Medicare number, for example, is very valuable to criminals. If they can steal yourMedicare card, talk you into revealing your number, or even pay you for your card, theyhave the key piece of information necessary to file a false claim. They need your numberto make the claim.

Only carry your Medicare card when you know you will need it to get the health servicesyou need. In fact, it would be wise to make a copy of your card and scratch out all butthe last 4 digits of your number and carry that copy instead of the real card. Do know,that if you are in an accident and need emergency medical care, no hospital will denyyou treatment because you don’t have your card with you.

You also don’t want to sign blank insurance claim forms. Someone may just be trying toget your Medicare Number and your signature. No telling how they might fill in the restof the form after you have left. Also be alert to “free” medical services. They will onlyask you for your Medicare number in return. Realize that nothing is ever free in thehealth care system and there are people who will pay big bucks for your number and usesome clever ruses in getting it. You should report anyone that advertises “free”consultations to people with Medicare.

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I’d like to ask what you would do if you get an offer for a free three-day trip to Law Vegaif you go to a clinic to get a free diagnostic test.”

Would you:•Make an appointment for the “free test” because you love going to Las Vegas•Hang up the phoneor•Report the fraud

[Ad lib something about how clever they are to not take the bait. Hanging up is good butreporting the fraud is even better.]

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Now, let’s try another one. How would you would respond to the statement “You get acall from a medical supply company saying that Medicare made a mistake in payment.The company wants your Social Security number and bank account information so theycan transfer funds to your account.”

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Would youA) Give the caller your bank account numberB) Hang up the phoneorC) Report the fraud

[Ad lib something about how clever they are to not take the bait. Hanging up is good butreporting the fraud is even better. Never, ever give your SSN or bank account informationto ANYONE who calls asking for it. No matter how legitimate they seem to be.]

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I’m glad to see that so many of you know how important it is to report any health care fraud.

I bet many of you are asking, OK I’ll report it, but where do I do so?

We have that information for you. [Insert information about your state’s Senior Medicare Patrol.You will want to include how to get in touch with the SMP and change the contact informationon the slide]•In [your state] we have a Senior Medicare Patrol. [include information about your SMP] Thisnational program has 4,000 active trained volunteers who take complaints about potentialhealth care fraud, investigate them and then refer them to the proper agency or official.To get in touch with our state Senior Medicare Patrol [SMP] call …………………….

To report Medicare fraud you can call 1 800 Medicare or 1 800 633 4227•You can also call the Department of Health and Human Services’ Inspector General at 1 800 4478477. You will find this number on your Medicare Summary Notice

•If you have private insurance, call the fraud number listed on your private insurance company’sEOB•To reach our state attorney general to report health care fraud, call ………….. [Mentionsomething about your state’s Medicare/Medicaid Fraud Control Unit -- that prosecutes thesecases.]• You can reach our state insurance commissioner or insurance department to get questionsabout health insurance and to find out if an agent is licensed, call ………………….

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One important provision in the health care law provides additional resources to combat health care fraud.

Already federal agencies have joined together to form HEAT. That acronym stands for the Health CareFraud Prevention and Enforcement Action Team. The HEAT has already charged over 550 defendants;obtained over 300 convictions; resulted in the sentencing of over 250 defendants; and secured over $260million in court-ordered restitutions, finds, and penalties. The strike force teams allow Medicare toconcentrate their agent and resources on the criminal hubs where a significant share of fraud occurs.Those hub cities are Miami, Los Angels, Detroit, Houston, Brooklyn, Tampa and Baton Rouge.

In July 2010 the task force announced an additional 94 arrests totaling over $280 million. Hundreds ofraids where carried out in what’s called the biggest Medicare fraud bust in history. Those arrestedincluded doctors and nurses billing taxpayers for procedures that never happened and clinics that didn’texist. The fraudulent claims were for HIV/infusion services, home healthcare, physical therapy and durablemedical equipment. Arrests were made in Miami, New York City, Detroit, Houston and Baton Rouge.

In October 2010 another crime ring was busted for defrauding Medicare of more than $35 million by usingstolen doctor and patient identities and setting up dozens of phony clinics coast-to-coast.

But that’s not enough. The new law helps by:

Putting more boots on the ground in the fight against fraud there will be

an increase in the support for Senior Medicare Patrols so they can do more educationon how to spot fraud more inter-agency cooperation to target fraud better and faster ways of analyzing claims data sharing data among Social security disability insurance, Veterans Administration,Department of Defense, Indian Health Services, Medicare, Medicaid more civil and criminal remedies to recover and return money to Medicare Trust FundTougher sentences for criminals. With an increase in federal sentencing guidelines tobe increased by 20% - 50% for health care fraud crimes that involve more than $1M inlossesMore screening of providers, such as mandatory licensing checks.

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[Add any closing remarks and thank you’s]

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