Medicare Prescription Card Fraud Takes a New Twist

HELENA – Scammers are selling fake Medicare prescription discount cards to seniors, claiming they are part of the new Federal Medicare Prescription Plan.

The new Medicare prescription drug benefit is complicated, and that confusion is putting older adults at risk. Montana state health officials warned about the scam Monday.

Fake Medicare discount cards have already turned up in Idaho and Georgia, according to Kimme Evermann, coordinator of Montana's State Health Insurance Assistance Program. Officials expect similar scams to appear across the country.

Montana is working to educate seniors about these scams before they spread here.

"We've been getting lots of calls from seniors who are confused about what the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 means to them," Evermann said.

Medicare recipients without Medicaid drug coverage can get a legitimate prescription-drug discount card. The discount typically ranges from 15 to 25 percent on prescription purchases.

Seniors must buy their $30 discount cards from Medicare-approved private health care providers. As of now, no providers have received federal approval yet.

"This is when people need to beware," said Chuckie Cramer, a member of the Governor's Advisory Council on Aging. "There may be people out promoting discount cards that may not be approved, and they may be trying to take advantage of our senior citizens."

Real discount cards will have a federal government seal stamped on them, Evermann said.

In April, the federal Center for Medicare and Medicaid Services will mail informational letters to all Medicare recipients. The letters will show what the official seal looks like and explain how to apply for cards.

Montana seniors should watch for fake cards and also "bait and switch" schemes, Evermann said.

In a bait and switch, providers offer high discounts upfront, then raise drug costs later. Federal rules allow providers to update their prices and which drugs they discount—as often as weekly.

Medicare monitors routine price changes to prevent private programs from undercutting federal prices too much.

But some providers may still try to exploit seniors, Evermann cautioned.

Seniors can use discount cards starting in June. Congress created the card program as a temporary measure until the permanent Medicare drug benefit launches in 2006.

Wait for your letter from the Center for Medicare and Medicaid Services before ordering a prescription discount card.

What to do if you suspect fraud

The Office of the Inspector General runs a confidential hotline for reporting suspected fraud:

By Phone:

1-800-HHS-TIPS (1-800-447-8477)

By Fax:

1-800-223-2164
(no more than 10 pages please)

By E-Mail:

By Mail:

Office of the Inspector General
HHS TIPS Hotline
P.O. Box 23489
Washington, DC 20026

When reporting Medicare fraud, include as much detail as possible: the person's name, address, phone number, and the basics of what happened—who was involved, what the scam was, when and where it occurred, and how it worked.

The hotline does not respond directly to written communications.