Medicare rebates lead to fraud alert

Medicare is mailing $250 rebate checks to about 80,000 people this week.

Over the course of the year, the Centers for Medicare and Medicaid Services (CMS) estimates 4 million seniors, about 10 percent of those covered by Medicare, will receive the rebate checks. The checks are one-time rebates for eligible seniors who have entered the Medicare Part D doughnut hole.

But along with the mailings, CMS is spending $1 million on radio, TV and print messages to warn these seniors to protect themselves from potential scams and fraud when it comes to Medicare benefits.

So it seems like a good time to talk about Medicare fraud and about Part D overall. David Sayen, Medicare Administrator for California, agrees.

"We know whenever change occurs in Medicare benefits, there are people out there who try to take advantage of seniors in some way. They may say, 'I'll file for your benefits,' for example, or come up with some other scam to get part of your rebate.

"The important thing for Medicare recipients in the Part D doughnut hole to know is that this rebate is automatic."

Q. OK, but what is this "doughnut hole"?

A. Most seniors with Medicare have Medicare Part D for prescription drug coverage.

Some Medicare insurance plans, HMOs for example, could offer different benefits. But most plans offer standard benefits for Part D.

Part D is only for prescription drug coverage. Under the current plan, after the Medicare recipient has paid a $310 deductible, a percentage of prescription drugs are covered until the beneficiary spends $2,830 out-of-pocket.

At that point, the beneficiary is in the "doughnut hole" and pays the full price for all prescription drugs until the out-of-pocket reaches $4,550. At that point, a more catastrophic coverage plan, one that is more generous, kicks in.

Under new healthcare legislation, the $250 rebate goes to all Medicare Part D participants in 2010 after they reach the "doughnut hole." The first checks, going out now, will be sent to those who reached the "hole" in the first quarter.

Q. But then the coverage changes next year?