Fraud, Waste, and Abuse
What to know
Fraud is intentional deception for gain; waste is misuse of resources without intent; abuse is practices that cause unnecessary cost. Medicare requires plans and first-tier entities to maintain a compliance program with written policies, a compliance officer, training, and a reporting mechanism. Agents must complete FWA training annually and report suspected fraud. Common schemes: billing for services not rendered, upcoding, unbundling, identity theft, and marketing fraud such as enrolling beneficiaries without consent or falsifying applications. The False Claims Act and the Anti-Kickback Statute are key laws; the Physician Self-Referral (Stark) Law restricts referrals. Beneficiaries and agents can report suspected fraud to the OIG or through the plan's compliance hotline, and whistleblowers have protections.
Traps
Questions distinguish fraud (intent) from waste (no intent) and abuse (unnecessary cost). Marketing fraud-such as an agent falsifying an enrollment or enrolling someone without consent-is FWA, not just a marketing violation. Do not confuse the Anti-Kickback Statute (remuneration for referrals) with Stark (financial relationships and referrals).
Rule of thumb
If an action involves intentional misrepresentation for payment or enrollment, treat it as fraud and report it through the compliance process.