For example, ever notice those TV ads where you can get some equipment, like a scooter, "at no cost to you"? That's a business based entirely around looking for people they can get qualified for free stuff from Medicare, then they make money by billing Medicare.
"Frontline" also had an episode investigating dental clinics that have sprouted up that were specifically designed to extract max dollars from government programs to get dental services to poor people.
I'm part of a grant writing consulting firm, and we've worked for many Community Health Centers (CHCs, also known as "Section 330 providers"). Most rely on some combination of Medicare / Medicaid funding, donations, and grants to keep their doors open. Medicare and Medicaid reimbursement rates are basically too low to pay for some combination of doctors, PAs, and NPs to provide care. Consequently, some combination of things happen:
* Care is so awful that it doesn't effectively exist. A patient sees a provider for one to two minutes and then gets hustled out the door with their problems put off until the next visit, since CHCs can bill by the visit, not by the time spent.
* Care is somewhat better but creatively accounted for. What if someone sees a provider for two, fifteen minute visits instead of one half hour visit?
* Some number of phantom patients receive services.
You may now call out that number three is FRAUD and THEFT and STEALING. But the virtuous organizations that don't use some form of creative accounting can't exist because they can't pay the rent, for supplies, and for providers. So there are game-theory-style incentives built in for working the system in such a way that the organization can survive. The feds know this, which is why they offer programs like the New Access Points (NAP), to throw a bone to CHCs (see here: http://blog.seliger.com/2010/08/11/the-health-resources-and-... for one place we've written about it).
Given this, what counts as "fraud?" The answer is, "It depends."
(A tangential note: we've worked for CHC clients in MSAs with a million or more people who are the only PCPs that accept Medicare / Medicaid. Specialists? Forget about it.)