What the Medicaid Law Says about Medicaid Fraud | Estate Planning Attorneys in Missouri and Kansas (2024)

The unfortunate reality is that Medicaid fraud and abuse exists and it potentially costs billions of dollars each year in diverted funds that should have been used for legitimate health care services. Because of the fraud and abuse, the cost of Medicaid is unnecessarily increased, as is the risk of harm to patients who are unwittingly exposed to unnecessary medical procedures.

What is Medicaid fraud and abuse?

Medicaid fraud occurs when someone knowingly misrepresents the truth in order to obtain unauthorized benefits. This type of fraud can be committed by patients as well as healthcare providers. Abuse, on the other hand, includes any practice that is inconsistent with acceptable economic, business or medical practices that unnecessarily increase costs.

Common examples of patient fraud

Here are a few examples of the most common types of patient fraud reported:

• Filing a claim for services or products not actually received
• Forging or altering receipts for reimbursem*nt
• Obtaining medications or products that are not needed and selling them on the black market
• Providing false information when applying for services
• Shopping for doctors in order to obtain multiple prescriptions
• Using someone else’s insurance coverage in order to obtain services

In order to avoid unknowingly committing fraud, there are a few things you should not do. First, do not contact your doctor to request a service that you don’t need. Likewise, don’t let anyone persuade you to see a doctor for care or services you don’t need.

Common examples of provider fraud

Medicaid fraud is not limited to the actions of the patient. It can also be committed by the health care service providers. Here are some common examples of Medicaid fraud at the hands of the provider:

• Billing for services not actually performed
• Billing duplicate times for the same service
• Falsifying a diagnosis
• Billing for a costlier service than performed
• Accepting kickbacks for patient referrals
• Billing for a covered service when a non-covered service was provided
• Ordering excessive or inappropriate tests
• Prescribing medication that is not medically necessary

There are a few ways you can look out for this type of fraud. First, when you obtain health care services, keep a record of the dates and save the receipts and statements you receive from providers. You can then compare the dates and services on your calendar with the statements you receive from Medicaid.

Avoiding the appearance of fraudulent transfers in estate planning

A common misconception that clients have is that, if they need long-term care they will be forced to give all of their property away before they can qualify for Medicaid. Because of this misconception, many clients believe they can simply transfer their property to their relatives and protect their eligibility for Medicaid. The problem is that you cannot simply give away your property before you apply for Medicaid.

Medicaid law imposes a 5-year look-back period

A law was passed in 2005 establishing a period of ineligibility to be applied to everyone who gives away their property at any time within five years of submitting their application for Medicaid benefits. Because the period of ineligibility begins when you actually apply for Medicaid, the timing of the transfers is key. That is why estate planning, and especially Medicaid planning is so important.

How the penalty period works

If a potential Medicaid applicant gives $10,000 of his estate to a family member four years and six months before submitting the application, the period of ineligibility begins when the application is submitted, not when the gift was made. The period of ineligibility is referred to as the “penalty period.” The length of the penalty period will depend on the value of the assets that were transferred.

The penalty period doesn’t apply in every situation

The five-year penalty period does not apply in every situation. Whether you have to wait to receive benefits depends on your specific situation. The Medicaid penalty period is only applicable for long-term care expenses in an institutional setting. On the other hand, acute care including hospital or physician services is not affected by the five-year look-back period.

If you have questions regarding Medicaid law, or any other elder law matters, contact Gaughan & Connealy for a consultation either online or by calling us at (913) 262-2000.