Medicare and Medicaid fraud is the largest type of fraud combatted by the False Claims Act (FCA). According to the Centers for Medicare and Medicaid Services (CMS), $45.8 billion was improperly billed between July 2012 and June 2013. (CMS, Medicare Fee-For-Service 2014 Improper Payments Report, 1–2 (2014).) This represents nearly 13 percent of all billing during that timeframe.
One common scheme involves violating the Eight-Minute Rule. Many services are billed in 15-minute increments called “units.” CMS, Medicare Claims Processing Manual, 5 § 20.2. To increase flexibility, CMS allows providers to bill within specified time ranges that are intended to average out to 15-minute units. See id. For example, services lasting between 8 and 22 minutes may be billed as one 15-minute unit. Id. at 5 § 20.2C. Manipulating these ranges will inflate billing numbers, and that is fraud.
These time ranges are highly susceptible to fraud. Two separate 8-minute sessions can be billed as two units, while a single 16-minute session can only be billed as one unit. That way, the provider can bill twice as much without proving additional service. Similarly, providers may manipulate their service time to move into a higher unit range, to maximize their billing. After all, a 22-minute session can be billed as just one unit, while an extra minute of service increases the bill to two units. While these ranges were intended to encompass average service times of 15-minutes, they can easily be abused.