Medicare fraud refers to claiming of Medicare health care reimbursement to which the claimant is not entitled. Health care fraud and abuse can lead to several legal consequences such as getting excluded from participating in all Federal health care programs and providers may risk losing their professional license as well. Federal laws that govern Medicare fraud and abuse include the False Claims Act (FCA), Anti-Kickback Statute (AKS), Physician Self-Referral Law (Stark Law), Social Security Act and United States Criminal Code. As medical coding and billing errors also come under health care fraud, providers must be careful about the medical billing outsourcing services they consider.

Major categories of improper billing highlighted by CMS include insufficient documentation, lack of medical necessity, and incorrect coding among others. Improper payments can also be the result of billing mistakes in claims. Medicare abuse is directly or indirectly causing unnecessary costs to the Medicare program, either by providers billing for unnecessary medical services, or charging excessively for services or supplies, or even by misusing codes on a claim, such as upcoding or unbundling codes.

Certain examples for Medicare fraud provided by CMS include billing Medicare for appointments the patient failed to keep, knowingly billing for services at a level of complexity higher than services actually provided or documented in the file, knowingly billing for services not furnished, supplies not provided, or both, including falsifying records to show delivery of such items and paying for referrals of Federal health care program beneficiaries.

Healthcare entities should take efforts to protect their organization from engaging in abusive practices and/or civil or criminal law violations.

Implement Compliance Programs

Hospitals can consider implementing compliance programs to avoid both erroneous and fraudulent claims. The Office of Inspector General (OIG) and CMS suggest that such a program would not only reduce the risk of improper claims and an external audit but improve the quality of care.

Based on the suggestions from the OIG, providers can consider

  • Developing and distributing written conduct standards and policies that promote the hospital’s commitment to compliance and can address areas of potential fraud
  • Appointing a Chief Compliance Officer and other compliance staff charged with operating and monitoring the compliance program and reporting to the hospital’s governing body
  • Implementing continuous education and regular training for staff
  • Maintaining a process to receive healthcare fraud reports and complaints
  • Introducing a system to respond to healthcare fraud and to take appropriate disciplinary actions against staff who violate compliance policies and laws
  • Using audits and evaluations to track compliance adherence and help reduce issues

It is recommended that an effective compliance program should maintain certain standards such as appropriate coding policies and procedures, non-retribution and/or non-retaliation policies, internal and external compliance audit standards and procedures, record retention policy, co-payment and deductible waiver policies, and code of conduct.

Focus on Clinical Documentation

Accurate clinical documentation and medical billing and coding are important for physicians to get proper reimbursement for the services they provide. The most common clinical documentation issues that were reported in RevCycle Intelligence include billing for services that were not rendered, medically unnecessary procedures, services performed by an unqualified provider, procedures or tests of low quality that are deemed worthless and separate services already included in a global fee.

In 2018, a Black Book survey found that most hospitals are increasingly implementing clinical documentation improvement technologies and they are achieving successful results.

To improve the medical billing and coding process, hospitals have to provide their staff with up-to-date training on the most recent CMS billing guidelines and coding standards, implement proper patient eligibility verification, and follow up and appeal any denied claims. Partnering with an experienced medical billing company helps practices meet accurate documentation requirements, while focusing on patient care.

Medicare Fraud Prevention Tips for Patients

Though Medicare has mailed new Medicare cards to covered individuals to help protect against identity theft, many scammers are using those newly issued Medicare ID cards to steal identities.

According to CMS, patients can prevent Medicare fraud by

  • Protecting their Medicare and Social Security numbers, just like credit card
  • Not providing Medicare card or number to anyone except their doctor or people they know
  • Not accepting any free medical care
  • Educating oneself about Medicare and knowing one’s rights to use them effectively
  • Using a calendar to record their doctor’s appointments and what tests or X-rays they undergo
  • Staying aware of what types of services and procedures can or cannot be billed under their policy
  • Ensuring they got the correct medication from pharmacy
  • Double-checking Medicare claims and statements when they receive them
  • Reporting suspected instances of fraud

Also read our blog on facts about dental billing fraud and abuse.