Fraudulent medical billing – an overview


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This article discusses the fraudulent healthcare billing practices and its impact on the U.S. healthcare system. This type of medical billing is to be avoided at all costs.

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Fraudulent medical billing – an overview

  1. 1. 1-800-670-2809 Fraudulent Medical Billing – An Overview Fraudulent medical billing is one of the major contributing factors to the rising healthcare costs in the U.S. This can be attributed to human or computer error, but in some cases it may be an intentional deception by the hospital, doctor, insurer or other medical billing specialist. A person who knowingly submits a false claim to benefit himself or others commits fraud. Fraud can also result from medical coding and billing errors that lead to excessive reimbursement. Examples of fraud may include submitting claims for services not provided, falsifying claims or medical records and misrepresenting dates, frequency, duration or description of services rendered.
  2. 2. 1-800-670-2809 With today’s incredibly complex medical billing system, medical providers and organizations are bound to make occasional mistakes when coding the services provided to patients. Most Common Types of Medical Billing Frauds and Abuse That Affect the U.S. Healthcare System • Upcoding: Submitting a claim for a service more comprehensive than the actual service provided leads to upcoding. For instance, billing for a broken ankle while the actual treatment provided was for a sprained ankle. • Cloning: This is the fraud practice of using an EHR system to automatically generate a more detailed patient observation profile by copying the details of another patient with similar symptoms to create the impression that a more thorough examination was done. The OIG (Office of the Inspector General) has indicated that this practice leads to improper
  3. 3. 1-800-670-2809 payments, incorrect documentation of records, and considerable risk to patients. • Phantom billing: One of the most common types of billing fraud has to do with services being billed that were not actually performed. This also affects healthcare costs in the millions of dollars invested in tracking and prevention. • Inflated hospital bills: Inflated medical bills occur when patients are billed more than a procedure should have cost, for extra equipment not actually used, or for the same service twice. Deliberate billing mistakes also contribute to inflated hospital bills. Patients can use an itemized bill to detect these fraudulent billing practices. • Service unbundling: With this practice, bills are provided for multiple procedures separately rather than billing them together as a bundle, with the aim to increase profit. • Self-referrals: This is when healthcare providers refer themselves or a partner provider to perform a service, usually for a financial incentive.
  4. 4. 1-800-670-2809 • Double billing: This is the practice of charging more than once for the same service that is similar to billing using an individual code and then again as part of an automated or bundled set of tests. EHR Technology Can Contribute to Healthcare Fraud According to a recent report from the OIG for the Health and Human Services Department (HSS), flaws in electronic health record systems (EHR) can also lead to overcharging. The online survey for this report found that CMS had provided only limited guidance to Medicare contractors on EHR fraud vulnerabilities. HSS officials have issued severe warnings against healthcare professionals who use web-based medical billing systems to overbill. Real Life Cases of Medical Billing Fraud 1. Report from the official website of the United States Attorney’s Office - Engage Medical, the medical billing group and three other medical practices have
  5. 5. 1-800-670-2809 agreed to pay a total of $3,340,979 to resolve claims that Engage Medical overbilled for nuclear stress tests conducted between July 2007 and March 2011. It is claimed that physicians and practices hired Engage to help process billings, and the company routinely billed Medicare twice for the same tests. 2. reports the case of a New York doctor arrested for submitting millions of dollars in false billings to Medicare. From January 2011 through mid-December 2013, Medicare was billed at least $85 million for surgical procedures purportedly performed by the doctor. CMS’ RAC Audits To reclaim the money wasted and lost, CMS implements recovery audits or RAC, to motivate healthcare providers to help create and sustain more accountable, evidence based, and streamlined healthcare services. The primary focus of RAC auditors or recovery firms is to identify overpayment of medical bills. Individual providers, hospitals, clinical laboratories, durable
  6. 6. 1-800-670-2809 medical equipment suppliers, hospices and home health agencies have all been the subject of fraud investigations. Medical Billing Advocates of America (MBAA) has also issued a free report on the web to educate the general public on medical bill overcharges and fraudulent billing practices. Fraudulent medical billing must be avoided at all costs. This is an area that needs special attention, which may not be possible in a busy physician office setting. A professional medical billing and coding company can be of immense support here, providing the service of experienced medical billing specialists and coders who can help healthcare providers avoid billing errors and adhere to industry guidelines.