Medicare fraud has been garnering a lot of attention in recent months, due in part to the Obama Administration's focus on reducing fraudulent practices in order to reduce the outflux of precious Medicare funds. By reducing waste and abuse, millions -- or even billions -- of dollars could be reallocated to cover the cost of care for those who truly need it.

The concept of Medicare fraud isn't new. Some home care providers, hospice companies, and even physicians have been taking advantage of the system for years. Some offenses are minor, involving stretching the limits of the guidelines and painting a patient's condition in the worst possible light to qualify them for services. Other schemes are outlandish, such as the case of a Florida physician who outright falsified patient conditions in order to bill for twice daily nursing visits, according to Bloomberg Businessweek.

The Wall Street Journal notes that home health care is an industry designed to save money, because home care is typically more affordable than assisted living or nursing home stays. However, the analysis conducted by the WSJ shows a correlation between the number of in-home visits and Medicare financial payouts, which raises some questions about the legitimacy of the rising number of claims.

The Fraud Crackdown

Kaiser Health News reports that the new health care laws will allocate an additonal $350 million to crack down on fraud and abuse in the health care system. Penalties for those caught abusing the system will also be increased, and technology to identify fraudulent activity improved.

A number of companies have been investigated and forced to pay large sums to settle Medicare fraud claims; in essence, paying back most or all of the funds collected fraudulently.