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In 2014, the United States spent approximately $3 trillion on health care. Medicare accounted for $554 billion of these costs, and approximately $60 billion were squandered because of incorrect billing methods, abuse, and fraud. Types of fraud included kickbacks, upcoding, and organized fraudulent crimes. To reduce the financial burden associated with these activities, the United States has created various fraud prevention programs. The purpose of this study was to identify methods of Medicare fraud, examine the various programs implemented by the US government to combat fraud and abuse, and determine the effectiveness of these programs. Although fraud prevention strategies have proven to be effective, the furtherance of these strategies is imperative to continually combat rising health care expenditures in the United States. Benefits of increased fraud prevention and detection are discussed in detail.