Fraud Kicks in Months Ahead of Medicare Drug Discount Card
By ROBERT PEAR

Published: February 17, 2004

WASHINGTON, Feb. 16 — Federal officials said Monday that they had detected evidence of fraud in the marketing of drug discount cards under the Medicare law signed 10 weeks ago by President Bush.

In some parts of the country, people have gone door to door offering "Medicare approved" cards, though none have been approved and enrollment does not begin until May, federal health officials said.

Mr. Bush has said that the cards, to be issued by private entities and endorsed by the government, will deliver "savings of 10 to 25 percent off the retail price of most medicines," though the amount will vary drug by drug and card by card. In addition, as he noted in signing the legislation on Dec. 8, low-income elderly people will be eligible for "a $600 credit on their cards, to help them pay for the medications they need."

Beneficiaries can sign up for the cards in May and start using them in June. But already, federal officials said, some people are promoting the cards as if they had received a federal seal of approval.

Valeria Allen, an insurance specialist at the federal Centers for Medicare and Medicaid Services, said, "Someone is fraudulently impersonating or misrepresenting Medicare by telephone and by door-to-door visits to beneficiaries' homes, to discuss the Medicare discount drug program and to obtain personal identifying information from beneficiaries."

In some cases, Ms. Allen said, the caller seems to have obtained personal information about beneficiaries before visiting their homes.