Medical Billing FraudMedical billing fraud and abuse arises mainly due to medical coding and billing errors which lead to improper reimbursements. Fraud is a deliberate deception that results in an unauthorized payment, while abuse is failing to adhere to accepted business practices. Medical billing abuse can be unintentional.

Physicians should be careful not to commit these errors which would make them a target of a fraud investigation. Committing such errors can lead to the suspension of providers from the Medicare program and even the imposition of civil monetary penalties, which, even if inadvertently committed, would negatively impact the physician’s reputation and practice.

Billing and Coding Practices to Avoid

A study by the American Health Information Management Association (AHIMA) on medical fraud and abuse found that about half of the errors identified was the result of insufficient or lack of documentation by healthcare providers, and one-third of the documentation errors were associated with providers who did not respond to repeated requests from auditors to submit documentation. Here are some of the things that physicians need to be wary of:

  • Upcoding – It occurs when a diagnosis or procedure is assigned a higher cost or rate of reimbursement than the actual service. For example, submitting a claim for broken wrist treatment when the treatment was given for a sprained wrist.
  • Billing for Services Not Provided – An example is billing Medicare for appointments that the patient did not keep.
  • Cloning – Using an EHR system to automatically create a more detailed patient observation profile by copying the similar file of another patient to create an impression that a more thorough examination was done.
  • Phantom Charging – This refers to charging for services that not have been rendered, which is usually done by copying from the records of other patients who might have undergone the same tests.
  • Inflated Hospital Debits – This is when the practice charges excessively for services or supplies. This also includes overcharging on equipment and length of stay.
  • Unbundling – This is a fraudulent practice in which a single service code, for e.g., blood or chemistry panels, are broken down to separate service codes, for getting more payment from the insurance company. This practice can be either intentional, i.e., coding alteration for higher payment or unintentional due to misunderstanding of coding practices.
  • Double Charging – This refers to charging more than once for the same service. For example, charging using an individual code and again for an automated or bundled set of tests.
  • Self Referrals – This happens when providers ordering tests on a patient refer themselves or a partner provider to perform the test service in return for financial compensation.
  • Keystroke Error – This occurs due to the entry of incorrect codes when typing, which result in overcharging or in some cases, undercharging.
  • Unnecessary Treatment – In this case the physicians performs unnecessary tests in order to bill for extra payments.

Ensuring Billing and Coding Compliance

Coding and billing processes are clearly areas that require special attention, which a physician in busy office setting will find difficult to manage. Partnering with a professional medical billing and coding company can ensure ethical, accurate coding in accordance with all regulatory requirements. Such companies have coding staff that have been properly trained and receive ongoing continuing education to assure that they are aware of changed rules and regulations. All claims are submitted only after they are double-checked for accuracy. All potential risks are examined and appropriate safeguards and compliance controls are instituted to ensure error-free processes.