Department of Health and Human Services 

OFFICE OF 

INSPECTOR GENERAL 

JANET REHNQUIST 

Inspector General 

NOVEMBER 2001 

OEI-09-00-00590 

Beneficiary Awareness of Medicare Fraud 

A Follow-up 
OFFICE OF INSPECTOR GENERAL 

The mission of the Office of Inspector General (OIG) mandated by Public Law 95-452, as 

amended by Public Law 100-504, is to protect the integrity of the Department of Health and 

Human Services programs as well as the health and welfare of beneficiaries served by them. This 

statutory mission is carried out through a nationwide program of audits, investigations, 

inspections, sanctions, and fraud alerts. The Inspector General informs the Secretary of program 

and management problems and recommends legislative, regulatory, and operational approaches to 

correct them. 

Office of Evaluation and Inspections 

The Office of Evaluation and Inspections (OEI) is one of several components of the Office of 

Inspector General. It conducts short-term management and program evaluations (called 

inspections) that focus on issues of concern to the Department, the Congress, and the public. The 

inspection reports provide findings and recommendations on the efficiency, vulnerability, and 

effectiveness of departmental programs. 

OEI's San Francisco Regional office prepared this report under the direction of Paul A. Gottlober, 

Regional Inspector General. Principal OEI staff included: 

REGION IX HEADQUARTERS

Pamela Minniear, Project Leader Rada Spencer, Program Specialist

Robert Gibbons, Program Analyst

Camille Harper, Program Analyst

Christopher Tarbell, Program Analyst

We would like to acknowledge the following OEI staff for their assistance in this project: 

Natasha Besch, Region II

Timothy Brady, Region IX 

Cheryl Dotts, Region IX

Tanaz Dutia, Region III

China Eng, Region I

Tina Fuchs, HQ

Nicole Gillette, Region II

Aimee Golbitz, Region I

Chris Gould, Region I

Joyce Greenleaf, Region I 

Vincent Greiber, Region II

Erin Guay, Region V

Norman Han, Region I

Russ Hereford, Region I

Steve Keenan, Region I

John Molnar, Region II

Gerius Patterson, Region IV

Elander Phillips, Region VII

Thomas Purvis, Region IX

Barbie Robinson, Region IX

Marco Villagrana, Region V

Kristy Williams, Region IV

Steven Zerebecki, Region IX

Thomas Zimmermann, Region II

To obtain copies of this report, please call the San Francisco Regional Office at (415) 437-7900. 

Reports are also available on the World Wide Web at our home page address: 

http://www.hhs.gov/oig/oei/ 
i

EXECUTIVE SUMMARY 

PURPOSE 

To assess Medicare beneficiary knowledge and awareness of Medicare fraud and the 

impact of the Department of Health and Human Services’ outreach initiatives. 

BACKGROUND 

In 1998, the Office of Inspector General (OIG) surveyed Medicare beneficiaries about 

their knowledge and awareness of Medicare fraud. The OIG found that beneficiaries 

believed that Medicare fraud was common, and it was their personal responsibility to 

report suspected cases of Medicare fraud. Most beneficiaries said that they read their 

Medicare statements but had not received information on Medicare fraud. Beneficiaries 

said that recognizing fraud was difficult. Most were neither aware of agencies that were 

working to stop Medicare fraud nor were they aware of the OIG’s fraud hotline. 

In 1999, the OIG outreach partners launched a nationwide campaign to educate 

beneficiaries about Medicare fraud. The campaign set forth a three-step process for 

beneficiaries to follow if they suspected Medicare fraud. Beneficiaries were told that, as a 

first step, they should clarify unusual Medicare charges with their health care provider. If 

questions remained, beneficiaries were advised to contact their Medicare insurance 

company. If they remained dissatisfied and suspected fraud, they were told to call the 

OIG hotline. 

Out of a random sample of 1,498, we completed surveys with 543 Medicare beneficiaries 

for a 36 percent response rate. We compared their responses to data in the 1998 OIG 

report. We also interviewed the OIG outreach partners. 

FINDINGS 

Beneficiary knowledge of Medicare fraud has increased since 1998. Beneficiary 

knowledge of Medicare fraud has increased 15 percentage points in the past 3 years. 

Twenty-four percent of beneficiaries are aware of efforts to reduce fraud. 

Beneficiaries are aware of groups both inside and outside the federal government who are 

involved in efforts to reduce fraud. 

Most beneficiaries are still not aware that there is a toll-free number to report 

Medicare fraud. In 1998, 86 percent of beneficiaries were not aware of the toll-free 

hotline for reporting Medicare fraud. In 2001, 85 percent of beneficiaries remain 

Beneficiary Awareness of Fraud OEI-09-00-00590 

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unaware of the hotline, despite the fact that the toll-free number appears on their claim 

statements which most of them read. 

Younger, urban beneficiaries are more likely to recall receiving information on 

Medicare fraud. Beneficiaries who live in rural areas and beneficiaries who are more 

than 75 years old reported receiving less information. 

Beneficiaries who receive information are more likely to know whom to contact if 

they encounter Medicare fraud. Of beneficiaries who receive information on Medicare 

fraud, only 14 percent would not know whom to call if they encountered fraud. 

Despite receiving more information on fraud, key beneficiary attitudes have not 

changed. Beneficiaries are still not optimistic about efforts to eliminate fraud. Almost 50 

percent do not believe that Medicare fraud is easy to recognize. 

Almost one-half of the beneficiaries who think they have experienced Medicare 

fraud reported it. As a first step, beneficiaries who suspect fraud most frequently 

contact their health care provider for clarification. 

Most beneficiaries regularly read their claim statements. As in the 1998 survey, the 

vast majority of beneficiaries report that they always read their claim statements. Those 

with poor vision, limited English skills, and lower incomes are less likely to read their 

statements. 

CONCLUSION 

Outreach activities which are designed to educate beneficiaries about Medicare fraud are 

meeting most of their goals. Beneficiaries in 2001 are more knowledgeable about 

Medicare fraud and are significantly more likely to receive information about fraud than 

they were 3 years ago. Further, beneficiaries are reporting suspected fraud using an 

approach consistent with the three-step process outlined in the “Who Pays? You 

Pay.”campaign. 

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TABLE OF CONTENTS 

PAGE

EXECUTIVE SUMMARY .................................................... i

INTRODUCTION .......................................................... 1

FINDINGS

Awareness of Fraud .................................................... 5

Receiving Information on Medicare Fraud ................................... 6

Encountering and Reporting Potential Fraud ................................. 8

Attitudes and Behaviors ................................................. 9

CONCLUSION ........................................................... 12

APPENDICES

A: Baseline Statistics .................................................. 13

B: Confidence Intervals for Selected Statistics ............................... 14

C: Analysis of Respondents versus Non-Respondents ......................... 17

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INTRODUCTION 

PURPOSE 

To assess Medicare beneficiary knowledge and awareness of Medicare fraud and the 

impact of the Department of Health and Human Services’ outreach initiatives. 

BACKGROUND 

Addressing Medicare fraud is an important issue within the Department of Health and 

Human Services (HHS). Medicare is vulnerable to fraud because of the large 

expenditures and administrative complexity of the program. Recent legislation, HHS 

initiatives, and educational outreach efforts all have attempted to address and eliminate 

fraud. 

Studies have shown that Medicare beneficiaries need more education about fraud. In a 

previous Office of Inspector General (OIG) report (Beneficiary Awareness of Fraud, 

OEI-12-97-00440), we found that only 23 percent of beneficiaries were knowledgeable 

about Medicare fraud and very few received information about it. Recent health surveys 

found that consumers believe that health care fraud is rampant, but they do not know how 

they can prevent it.1 

This report addresses current Medicare enrollees’ level of awareness of Medicare fraud 

and compares it to previous levels which we reported in our 1998 report. We also 

assessed the effects of the HHS educational outreach activities, specifically the “Who 

Pays? You Pay.” campaign. 

Recent Legislative Initiatives 

In recent years, Congress enacted a number of laws to assist in the fight against health 

care fraud and abuse. The 1996 Health Insurance Portability and Accountability Act 

(P. L. 104-191), also known as HIPAA, contains several provisions designed to address 

Medicare fraud and abuse. One provision created the Health Care Fraud and Abuse 

Control Program which mandates the coordination of health care law enforcement at all 

levels, established a dedicated stream of funding for fighting fraud and abuse, and 

provided for the education of the health care industry on fraudulent health care practices. 

Two other provisions in HIPAA are the Medicare Integrity Program and the Incentive 

Program for Fraud and Abuse Information. These provisions allow HHS to contract with 

eligible entities to promote program integrity. 

1

American Association of Retired Persons, “America Speaks Out on Health Care Fraud,” 

consumer surveys for 1996, 1998, and 2000. 

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The Omnibus Consolidated Appropriations Act of 1997 (P. L. 104-208) directs the 

Administration on Aging to establish demonstration projects that use the skills of retired 

professionals to help prevent Medicare fraud and abuse. These demonstration projects, 

commonly referred to as Harkin Grants, fund Health Care Anti-Fraud and Abuse 

Community Volunteer Projects which assist with the recruitment and training of 

volunteers and the implementation of community education activities. 

The Balanced Budget Act of 1997 (P. L. 105-33) includes several provisions to strengthen 

anti-fraud and abuse efforts and to improve Medicare program integrity. Among other 

things, the Act requires the Health Care Financing Administration - now known as the 

Centers for Medicare & Medicaid Services (CMS) - to issue an annual notice to 

beneficiaries that: 

C encourages beneficiaries to check their Medicare statements carefully for accuracy 

and report any errors by calling the OIG toll-free telephone number, 

C informs beneficiaries of their right to request an itemized statement for Medicare 

items and services, and 

C describes the program established under HIPAA to collect information on 

Medicare fraud and abuse. 

Moreover, effective January 1, 1998, the Balanced Budget Act of 1997 requires 

that all Medicare claim statements include the OIG toll-free telephone number for 

reporting information about waste, fraud, and abuse. 

HHS Efforts to Address Health Care Fraud 

In 1996, HHS launched a nationwide educational outreach initiative to help reduce the 

incidence of fraud and abuse in Medicare. This initiative evolved into a public-private 

partnership among five groups: the Administration on Aging, the Department of Justice, 

the CMS, the American Association of Retired Persons (AARP), and the OIG. Activities 

included conducting a nationwide outreach campaign to educate beneficiaries and others 

about Medicare fraud and abuse, establishing a more user-friendly OIG hotline, and 

increasing collaboration with other agencies and organizations involved in fighting 

Medicare fraud. 

In February 1999, the outreach partners launched a nationwide campaign to educate, 

inform, and advise millions of Medicare beneficiaries about Medicare fraud and abuse. 

"Who Pays? You Pay." campaign materials set forth a three-step process for beneficiaries 

to follow if they suspect Medicare fraud. First, beneficiaries were told that they should 

clarify unusual or questionable Medicare charges with their health care provider. Second, 

if questions remained, the beneficiaries were directed to contact their Medicare insurance 

company. As a last resort, if beneficiaries were still dissatisfied and suspected fraud, they 

were directed to call the OIG hotline. As part of the campaign, the partners developed a 

televised public service announcement featuring a dripping faucet which represented 

Medicare money that was being lost due to fraud, waste, and abuse. 

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The launch of the campaign incorporated a single-day training event attended by 

approximately 10,000 Medicare beneficiaries nationwide. Thirty-one cities held a press 

conference with five interactive sites. Medicare beneficiaries convened in cinemas, AARP 

Regional Offices, university auditoriums, and other locations in major metropolitan areas 

to view a national training program to learn how to detect Medicare fraud. 

AARP Studies on Health Care Fraud and Abuse 

The AARP has conducted three consumer telephone surveys in the last 5 years that were 

designed to assess public attitudes toward health care fraud. The 1996, 1998, and 2000 

consumer surveys measured Americans’ understanding of and personal experiences with 

health care fraud and abuse. Although the majority of respondents to all surveys believed 

that fraud was widespread in the health care industry, the prevalence of this attitude 

appears to be declining. In 1996, 93 percent of respondents reported that health care 

fraud was either somewhat or extremely widespread. Approximately 83 percent believed 

this in 1998 and 78 percent in 2000. 

Previous Office of Inspector General Study 

In 1998, the OIG published the results of a survey of Medicare beneficiaries which 

assessed their knowledge and awareness of Medicare fraud. According to the survey: 

C more than half of the beneficiaries believed that Medicare fraud was common; 

C ninety-four percent believed that it was their personal responsibility to report 

suspected cases of Medicare fraud; 

C seventy-four percent of beneficiaries “always” read their Medicare statements; 

C most beneficiaries believed that recognizing fraud was difficult, and most have 

never received information on Medicare fraud; and 

C most respondents were not aware of agencies working to stop Medicare fraud nor 

of the OIG’s toll-free number. 

METHODOLOGY 

To achieve the objectives of our study, we compared beneficiaries’ current knowledge and 

attitudes about Medicare fraud in 2001 to baseline data in our 1998 report. To ensure 

comparability with the baseline data, we duplicated, as closely as possible, the 

methodology used in the previous study. 

We selected a simple random sample of 1,500 Medicare beneficiaries from CMS’s national 

enrollment database, as of October 28, 2000. Two of the beneficiaries in our sample died 

prior to October 28, 2000, but their names had not been removed from the enrollment 

database. We omitted these beneficiaries from our sample, which reduced the 

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size to 1,498. Our sample included beneficiaries enrolled in both Medicare fee-for-service

and managed care plans.2

We modified the telephone survey instrument used in our 1998 evaluation to eliminate

questions that were not relevant to the follow-up effort, and added others about the “Who

Pays? You Pay.” campaign. We used two methods for collecting data from the

beneficiaries in our study. First, we obtained telephone numbers for 59 percent of the

1,498 beneficiaries in our sample. We attempted to conduct telephone surveys with the

890 beneficiaries for whom we had telephone numbers. Secondly, some of the

beneficiaries that we spoke with by telephone expressed a preference to receive the survey

by mail. For those beneficiaries, as well as some others that we were unable to reach by

telephone, we designed and mailed written surveys. In total, we mailed 

118 surveys. 

A total of 543 beneficiaries responded to our survey. We were able to complete telephone

surveys with 485 respondents. Of the 118 mailed surveys, 58 were completed and

returned. Of those beneficiaries for whom we obtained telephone numbers, 

61 percent responded (543 out of 890). Overall, our response rate was 36 percent 

(543 out of 1,498). We completed data collection during March - May, 2001.

We also interviewed the campaign partners for background information.

Our review was conducted in accordance with the Quality Standards for Inspections

issued by the President’s Council on Integrity and Efficiency.

2

Beneficiaries who completed our survey “self-selected” the type of Medicare insurance in which 

they were enrolled. Survey respondents answered a few screening questions to guide them in their 

selection. The categories were fee-for-service or managed care. We did not distinguish among the various 

types of non-traditional Medicare insurance, such as Medicare+Choice or preferred provider organizations. 

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FINDINGS 

AWARENESS OF FRAUD 

Beneficiary knowledge of Medicare fraud has increased since 1998 

Since 1998, beneficiary knowledge3 of Medicare fraud has increased 15 percentage points. 

We found that 38 percent of beneficiaries are knowledgeable about Medicare fraud in 

2001, as compared to 23 percent of beneficiaries in 1998. (See Appendix A for a 

comparison of baseline and other selected statistics.) Our analysis of the data shows that 

this increase can be attributed largely to the increase in information beneficiaries have 

received about Medicare fraud. 

Twenty-four percent of beneficiaries are aware of efforts to reduce Medicare 

fraud 

Approximately one-quarter of the beneficiaries who answered the question, “Are you 

aware of any efforts to reduce Medicare fraud?” said they were aware of some efforts to 

fight fraud. Beneficiaries are aware of both federal government and non-federal groups 

that are involved in efforts to reduce fraud. Beneficiaries mentioned the OIG, CMS, 

AARP, and the insurance companies that process their Medicare claims. 

Informed beneficiaries and those enrolled in fee-for-service plans are more aware 

of efforts to reduce fraud 

Medicare beneficiaries who receive information about Medicare fraud are more likely to 

be aware of efforts to reduce fraud. We categorized beneficiaries as having “received 

information” if they have attended any presentations, seen a public service announcement, 

heard of the “Who Pays? You Pay.” campaign, or asked about or looked for information 

on Medicare fraud. Approximately 37 percent of beneficiaries who recalled receiving 

information about Medicare fraud were aware of efforts to reduce it. In contrast, only 16 

percent of beneficiaries who did not recall receiving information were aware of efforts to 

reduce fraud. Informed beneficiaries are more aware of efforts to reduce Medicare fraud. 

Fee-for-service beneficiaries also are more aware of efforts to reduce Medicare fraud than 

managed care beneficiaries. Twenty-seven percent of fee-for-service beneficiaries are 

aware of efforts to reduce fraud compared to 15 percent of managed care beneficiaries. 

3

In our previous report, Beneficiary Awareness of Medicare Fraud (OEI-12-97-00440), 

knowledge was defined as having received information on how to recognize Medicare fraud, asked about or 

looked for information about Medicare fraud, or being aware of a toll free hotline to report Medicare fraud. 

Beneficiary Awareness of Fraud OEI-09-00-00590 

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Most beneficiaries are still not aware of the toll-free hotline to report Medicare 

fraud 

Beneficiary awareness of the toll-free fraud reporting hotline has not increased. In 1998, 

approximately 86 percent of beneficiaries were not aware of the toll-free hotline for 

reporting Medicare fraud. In 2001, 85 percent of beneficiaries remain unaware of the 

hotline. In 1998, Congress mandated that the OIG hotline number appear on all Medicare 

claim statements. According to one hotline employee, although the number of calls to the 

hotline has increased since 1998, the number of beneficiary complaints about fraud 

actually has decreased. Hotline calls increased, because the OIG hotline number is 

included on the claim statements. Therefore, beneficiaries call with general inquiries, not 

just to report fraud. 

RECEIVING INFORMATION ON MEDICARE FRAUD 

Beneficiaries receive information about fraud from a variety of sources 

Approximately 45 percent of beneficiaries recalled receiving information about Medicare 

fraud. Beneficiaries mentioned receiving information from more than 15 different sources, 

including governmental organizations such as CMS and their Social Security office. 

Consumer advocacy groups, such as AARP, also were cited, as well as general media 

outlets, such as the radio and the Internet. One beneficiary said, “I get notices from lots of 

groups all the time...” 

Source: Office of Evaluation and Inspections, 2001 

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Some beneficiaries also report receiving information about Medicare fraud from the“Who 

Pays? You Pay.” campaign. Medicare beneficiaries receive campaign information 

through written brochures and pamphlets, the Internet, public service announcements, 

seniors citizens groups, and AARP. 

Both Medicare beneficiaries and campaign partners report that television is a particularly 

effective method for providing information to beneficiaries about Medicare fraud. Of the 

beneficiaries who heard about the “Who Pays? You Pay.” campaign, 54 percent 

mentioned the television public service announcement as the source. Similarly, more than 

half of the campaign partners specifically mentioned the public service announcement as 

particularly successful in reaching beneficiaries. According to one partner, “The ‘Dripping 

Faucet’ announcement received lots of play and was pretty effective.” 

Older beneficiaries and those who live in rural areas are less likely to report 

receiving information concerning Medicare fraud 

Older beneficiaries are significantly less likely to recall receiving information about 

Medicare fraud than younger beneficiaries. Sixty percent of those beneficiaries under 

65 years of age report receiving information. In contrast, 48 percent of beneficiaries who 

are between the ages of 65 and 75 report receiving information. This figure decreases to 

40 percent for beneficiaries who are more than 75 years old. 

Source: Office of Evaluation and Inspections, 2001 

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Beneficiaries living in urban areas are more likely to recall receiving information than 

beneficiaries who live in rural communities. Of beneficiaries who reside in urban4

 areas, 

48 percent reported receiving information on fraud. In contrast, only 34 percent of 

beneficiaries who live in rural5 areas report receiving information on fraud. 

Source: Office of Evaluation and Inspections, 2001 

ENCOUNTERING AND REPORTING POTENTIAL FRAUD 

Beneficiaries still experience potential Medicare fraud 

Approximately 11 percent of Medicare beneficiaries suspect that they have encountered 

Medicare fraud. This proportion is smaller, though not significantly, than the 19 percent 

of beneficiaries who reported experiencing Medicare fraud in our 1998 survey. 

Beneficiaries experience potential Medicare fraud in many forms. Approximately 

6 percent of beneficiaries report that they were billed for the same services or equipment 

more than once, while approximately 5 percent report that they were billed for services or 

equipment they did not receive. Beneficiaries believe these were incidents of actual fraud 

and not errors resulting from honest mistakes. For example, one Medicare beneficiary 

stated that he continues to receive monthly bills for a hand brace made after an earlier 

surgery, while another beneficiary reported that he was billed for a pacemaker that he did 

not receive. After reviewing claim statements following a hospital discharge, one 

beneficiary realized that Medicare was billed for 2 extra days and medications that she did 

not receive. When she questioned the hospital, the response was, “You didn’t have to 

pay.” 

4 Urban is categorized as 50 percent or more of the county is urban, according to census data. 

5 Rural is categorized as 50 percent or less of the county is designated as rural by census data. 

Beneficiary Awareness of Fraud OEI-09-00-00590 

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Beneficiaries also report that individuals other than their regular health care providers have 

offered them “free” medical equipment or services that would be billed to the Medicare 

program. Approximately 10 percent have been offered “free” medical services, tests, or 

equipment. Less than 1 percent of beneficiaries report that they actually have been sent 

equipment that was not ordered by their doctor. 

Beneficiaries who receive information are more likely to know whom to contact if 

they encounter Medicare fraud 

Only 14 percent of beneficiaries who recalled receiving information said they would not 

know whom to call if they encountered fraud. Comparatively, approximately 22 percent 

of beneficiaries who have not received information about fraud said they did not know 

whom to call if they encountered fraud in the Medicare program. Receiving information 

can increase beneficiary awareness of groups that might be able to help them with fraud. 

Some of the groups that beneficiaries report they would call include: 

Medicare Fraud Contacts 

Groups Mentioned Percent Mentioned 

Medicare/CMS 27.8 percent 

Social Security Office 10.3 percent 

Person or facility that may have committed the 

fraud 8.6 percent 

Insurance company that processes the claims 8.4 percent 

Phone number on Medicare Notice 4.2 percent 

OIG Hotline 2.5 percent 

Source: Office of Evaluation and Inspections, 2001 

ATTITUDES AND BEHAVIORS 

Despite receiving more information on fraud, key beneficiary attitudes have not 

changed 

Beneficiaries are still not optimistic about efforts to eliminate Medicare fraud. In 1998, 

almost 17 percent of beneficiaries agreed with the statement, “It’s not worth the time and 

effort for me to report and pursue suspected health care fraud.” In 2001, approximately 

16 percent of beneficiaries agree with that statement. As one respondent mentioned, “I 

don't really follow my mom's health expenses too much because she is in a nursing home. 

I really just let them do it and assume that she is getting what she needs. Besides, how am 

I going to stop fraud?” 

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Medicare beneficiaries still do not believe that Medicare fraud is easy to recognize. In 

1998, almost 50 percent of beneficiaries did not believe that Medicare fraud is easy to 

recognize. Some beneficiaries mentioned that confusing Explanation of Medicare Benefits 

Notices and Medicare Summary Notices make it difficult for them to determine what was 

billed to Medicare. According to one beneficiary: “...you can't figure out what they're 

billing for. I have no idea what the codes are; whether they're right or wrong, you'll never 

know. To catch fraud, you need to know what the codes are. The public's never going to 

know. I have to assume the best.” 

Approximately half of beneficiaries who think they have encountered Medicare 

fraud reported it 

Of those beneficiaries who think they have encountered fraud, approximately 48 percent

reported the incident. Beneficiaries reported fraud in several ways. Most often,

beneficiaries contacted the person or facility that submitted the Medicare claim for

clarification (39 percent) or the Medicare program directly (35 percent). Beneficiaries

also reported suspected fraud to the insurance company that processes their Medicare

claims (13 percent) and to the Inspector General’s fraud hotline (9 percent).

However, beneficiaries mentioned several reasons why they hesitate to report Medicare

fraud: 

C They want to be sure it is fraud.

C Their doctor might get in trouble.

C They are concerned about the repercussions that would follow if proven wrong.

C They do not want to get anyone in trouble.

Most beneficiaries regularly read their claim statements 

In both 1998 and 2001, we found that most beneficiaries who receive Medicare claims 

statements report that they “always” read them. In 1998, approximately 74 percent of 

beneficiaries “always” read their claim statements. In 2001, approximately 80 percent of 

beneficiaries stated that they always read their claim statements. Approximately 

47 percent of beneficiaries have someone else, such as a family member, friend, or 

professional, also read their Medicare statements. 

Beneficiaries with poor vision, limited English skills, lower incomes, and who are 

pessimistic about fraud are less likely to read their claim statements. The frequency with 

which beneficiaries read their Medicare claim statements is directly associated with 

income, comfort with reading English, and visual ability. Eighty-two percent of 

beneficiaries who earn more than $10,000 per year “always” read their claim statements. 

In contrast, 67 percent of beneficiaries who earn less than $10,000 annually stated that 

they “always” read their claim statements. Sixty-six percent of beneficiaries who are less 

comfortable reading English report “always” reading their claim statements, whereas 

82 percent of beneficiaries who read English very well report “always” reading their claim 

statements. Eighty-three percent of respondents who see “very well” report 

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“always” reading their claim statements; in contrast with 72 percent of beneficiaries who 

do not see as well. Finally, beneficiaries who agree with the statement “It’s not worth the 

time and effort for me to report and pursue suspected health care fraud” are also less likely 

to“always” read their claim statements. 

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CONCLUSION 

Outreach activities which are designed to educate beneficiaries about Medicare fraud are 

meeting most of their goals. Beneficiaries in 2001 are more knowledgeable about 

Medicare fraud and are significantly more likely to receive information about fraud than 

they were 3 years ago. Further, beneficiaries are reporting suspected fraud using an 

approach consistent with the three-step process outlined in the “Who Pays? You 

Pay.”campaign. 

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Appendix 

Baseline Statistics

The following table compares the point estimates and 95 percent confidence intervals for 

selected baseline statistics from our 1998 and 2001 surveys. To mirror the methodology 

used in the 1998 report, in calculating the 2001 baseline statistics, we limited our analysis 

to include those beneficiaries who submitted at least one claim to a Medicare Part B 

carrier during 2000. Additionally, we excluded those beneficiaries who were enrolled in 

managed care during 2000. (n = 271). 

Baseline 

Statistic 

1998 Survey Results 2001 Survey Results Results of t Test 

Point 

Estimate 

95 % 

confidence 

interval 

Point 

Estimate 

95% 

confidence 

interval 

Significant 

at 95%? 

P 

value 

Percent of Medicare 

beneficiaries who 

always read their 

claim statements 

74% 69% - 79% 79% 75% - 84% No 0.13 

Percent of Medicare 

beneficiaries who 

are knowledgeable 

about fraud 

23% 19% - 28% 38% 32% - 44% Yes <0.01 

Percent of Medicare 

beneficiaries who 

are not aware of any 

agencies that work 

to reduce Medicare 

fraud 

88% 84% - 91% 72% 66% - 77% Yes <0.01 

Percent of 

beneficiaries who 

do not know there 

is a toll-free hotline 

to report Medicare 

fraud 

86% 82% - 89% 85% 81% - 89% No 0.87 

Of Medicare 

beneficiaries who 

say they may have 

encountered fraud, 

percent who 

reported it 

55% 40% - 69% 50% 31% - 69% No 0.71 

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Appendix B 

Confidence Intervals for Selected Statistics

The following table show the point estimates and 95 percent confidence intervals for 

selected statistics in the order that they appear in the report. 

Statistic Point 

Estimate 

95 Percent 

Confidence 

Interval 

Of beneficiaries who answered the question “Are you 

aware of any efforts to reduce Medicare Fraud,” percent 

who answered “yes” 

24% 20% - 27% 

Of beneficiaries who received information on Medicare 

fraud, percent who answered “yes” to the question “Are 

you aware of any efforts to reduce Medicare Fraud?” 

37% 31% - 44% 

Of fee-for-service beneficiaries, percent who are aware of 

efforts to reduce Medicare fraud 27% 23% - 32% 

Of managed care beneficiaries, percent who are aware of 

efforts to reduce Medicare fraud 15% 7% - 23% 

Of beneficiaries who did not receive information on 

Medicare fraud, percent who answered “yes” to the 

question “Are you aware of any efforts to reduce 

Medicare Fraud?” 

16% 11% - 20% 

Percent of beneficiaries who reported receiving 

information about Medicare fraud 45% 41% - 50% 

Percent of beneficiaries who had heard of the “Who 

Pays? You Pay.” campaign on how to report Medicare 

fraud 

6% 4% - 9% 

Of the beneficiaries who heard of the “Who Pays? You 

Pay.” campaign, percent who said they had also seen a 

television PSA about the campaign 

54% 37% - 72% 

Percent of beneficiaries who suspect that they have 

encountered Medicare fraud 11% 8% - 15% 

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Appendix B 

Statistic Point 

Estimate 

95 Percent 

Confidence 

Interval 

Percent of beneficiaries who report that Medicare was 

billed twice for the same goods or services 6% 4% - 8% 

Percent of beneficiaries who report that Medicare was 

billed for services or equipment they did not receive 5% 3% - 7% 

Percent of beneficiaries who were offered free medical 

services, tests, or equipment 10% 8% - 13% 

Percent of beneficiaries who report that they were sent or 

delivered equipment that was not ordered by their doctor 0.2% .04% -1.02% 

Of beneficiaries who received information about 

Medicare fraud, percent who answered “don’t know” to 

the question “Who would you contact if you experienced 

fraud while in the Medicare program?” 

14% 10% - 18% 

Of beneficiaries who did not receive information about 

Medicare fraud, percent who answered “don’t know” to 

the question “Who would you contact if you experienced 

fraud while in the Medicare program?” 

22% 17% - 27% 

Percent of beneficiaries who agreed with the statement 

“It’s not worth the time and effort for me to report and 

pursue suspected health care fraud.” 

16% 11% - 20% 

Percent of beneficiaries who disagree with the statement 

“Medicare fraud is easy to recognize.” 49% 43% - 55% 

Of beneficiaries who encountered suspected Medicare 

fraud, percent who reported the incident 48% 34% - 62% 

Percent of beneficiaries who report that they “always” 

read their Medicare claim statements 80% 76%-84% 

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Appendix B 

Statistic Point 

Estimate 

95 Percent 

Confidence 

Interval 

Percent of beneficiaries who report that someone else 

reads their Medicare claim statements 47% 42%-52% 

Of beneficiaries earning less than $10,000, percent who 

report “always” reading their Medicare claim statements* 67% 53%-80% 

Of beneficiaries earning more than $10,000, percent who 

report “always” reading their claim statements* 82% 77% - 87% 

Of beneficiaries who read English “very well,” percent 

who report that they “always” read their Medicare claim 

statements* 

82% 78% - 87% 

Of beneficiaries who do not read English “very well,” 

percent who report that they “always” read their 

Medicare claim statements* 

66% 54% - 78% 

Of beneficiaries who see “very well,” percent who report 

that they “always” read their Medicare claim statements* 83% 78% - 88% 

Of beneficiaries who do not see “very well,” percent who 

report that they “always” read their Medicare claim 

statements* 

72% 65% - 80% 

Of beneficiaries who agree with statement, “It’s not 

worth the time and effort for me to report and pursue 

suspected health care fraud,” percent who “always” read 

their Medicare claim statements 

67% 55% - 79% 

Of beneficiaries who disagree with statement, “It’s not 

worth the time and effort for me to report and pursue 

suspected health care fraud,” percent who “always” read 

their Medicare claim statements 

83% 79% - 87% 

* Of beneficiaries who answered the question 

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Appendix C 

Analysis of Respondents Versus Non-Respondents 

We compared survey respondents with survey non-respondents for five variables: 

(1) beneficiary age at the time of the interview, (2) race of the beneficiary, (3) gender of 

the beneficiary, (4) median income of local community, and (5) urban-rural residence. We 

found that respondents are not different from non-respondents by gender or the urbanrural character of the community. However, respondents are different from 

non-respondents by age, race, and median area income. To determine the effect of the 

relationship between response rate and age, race, and median income, we conducted an 

additional analysis of the baseline statistics listed in Appendix A. In this analysis, we 

assumed that non-respondents would have answered the same as respondents within the 

same age, race, or median area income categories. We then recalculated the baseline 

statistics. We found that the results were all within the 95 percent confidence intervals of 

the original estimates. Therefore, we did not find any statistical evidence of age, race, or 

median income bias because of non-response. 

Analysis by Age 

Respondents differed significantly from non-respondents by age. The under-65 and 

85-and-older groups are under represented among the respondents, whereas the 75 to 

84 age group is over represented. 

Respondents versus Non-Respondents by Age Group 

Age Respondents Non-Respondents 

Under 65 years 10.9% 16.0% 

65 to 74 years 41.8% 38.6% 

75 to 84 years 37.9% 30.9% 

85 years and older 9.4% 14.5% 

The chi-square for respondents versus non-respondents by age group is statistically 

significant: 

chi-square = 19.533 degrees of freedom = 3 probability = .0002 

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Appendix C 

Analysis by Race 

Respondents differed significantly from non-respondents by race. As shown in the table 

below, beneficiaries who were white were over-represented among respondents. 

Respondents versus Non-Respondents by Race 

Race Respondents Non-Respondents 

White 89.3% 80.7% 

Other 10.7% 19.3% 

Chi-square for respondents versus non-respondents by race is statistically significant: 

chi-square = 19.0535 degrees of freedom = 1 probability < .0001 

Analysis by Median Area Income 

Respondents differed significantly from non-respondents in the median income of the zip 

code of residence. As shown in the table, respondents lived within zip codes with a higher 

median income than non-respondents. 

Respondents versus Non-Respondents by Median Income 

Median Income Respondents Non-Respondents 

Median zip code income 

(standard error) 

$31,470 

($509.06) 

$30,049 

($390.64) 

T-test for respondents versus non-respondents by median zip code income is statistically 

significant at the 95 percent confidence level: 

t= -2.21 degrees of freedom =1364 probability ># t# = .0270 

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