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Medicare-Fraud Tip Rewards Boosted to $10 Million by U.S.

Tips that uncover Medicare fraud may be worth as much as $10 million for whistle-blowers, a boost from a maximum payout of $1,000, as the government seeks to reduce misuse of the health program.

The action to raise the potential payments, modeled after an Internal Revenue Service program, may increase antifraud rewards to Medicare beneficiaries to 149 a year on average, compared with a total of 18 from 2000 to 2012, the Department of Health and Human Services said today in a statement. That would mean recovering about $29 million a year, the agency said.

President Barack Obama promised greater vigilance against health-care fraud when he began crafting what would become the 2010 Affordable Care Act. Medicare, the almost $600 billion U.S. health plan for the elderly and disabled, has been vulnerable to fraud though no reliable estimates exist on the costs.

“Today’s announcement is a signal to Medicare beneficiaries and caregivers, who are on the front lines of this fight, that they are critical partners in helping protect taxpayer dollars,” Health and Human Services Secretary Kathleen Sebelius said in the statement.

In the past decade, the government has recovered about $193,069 per case on average when beneficiaries report fraud, according to the proposed rule. The changes would make Medicare beneficiaries eligible for rewards of as much as 15 percent of fraud that the government recovers, with the maximum reward of $10 million. Beneficiary rewards for reporting fraud are now capped at 10 percent of recoveries with a maximum of $1,000.

Based on a similar IRS program, the Medicare increase may lead to reward payouts of about $4.3 million a year, the agency said.

To contact the reporter on this story: Alex Wayne in Washington at awayne3@bloomberg.net

To contact the editor responsible for this story: Reg Gale at rgale5@bloomberg.net

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