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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 excessie
reimbursement. !xamples of fraud may include
submitting claims for serices not proided, falsifying
claims or medical records and misrepresenting dates,
fre"uency, duration or description of serices rendered.
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#ith today$s incredibly complex medical billing system,
medical proiders and organi%ations are bound to make
occasional mistakes when coding the serices proided
to patients.
Most Common Types of Medical Billing Frauds and
Abuse That Affect the U! "ealthcare !ystem
Upcoding# Submitting a claim for a serice more
comprehensie than the actual serice proided
leads to upcoding. For instance, billing for a broken
ankle while the actual treatment proided was for a
sprained ankle.
Cloning# This is the fraud practice of using an !&'
system to automatically generate a more detailed
patient obseration profile by copying the details of
another patient with similar symptoms to create the
impression that a more thorough examination was
done. The ()* +(ffice of the )nspector *eneral, has
indicated that this practice leads to improper
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payments, incorrect documentation of records, and
considerable risk to patients.
$hantom billing# (ne of the most common types
of billing fraud has to do with serices being billed
that were not actually performed. This also affects
healthcare costs in the millions of dollars inested in
tracking and preention.
%nflated hospital bills# )nflated medical bills occur
when patients are billed more than a procedure
should hae cost, for extra e"uipment not actually
used, or for the same serice twice. -eliberate
billing mistakes also contribute to inflated hospital
bills. .atients can use an itemi%ed bill to detect
these fraudulent billing practices.
!ervice unbundling# #ith this practice, bills are
proided for multiple procedures separately rather
than billing them together as a bundle, with the aim
to increase profit.
!elf&referrals# This is when healthcare proiders
refer themseles or a partner proider to perform a
serice, usually for a financial incentie.
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'ouble billing# This is the practice of charging
more than once for the same serice that is similar
to billing using an indiidual code and then again as
part of an automated or bundled set of tests.
(") Technology Can Contribute to "ealthcare
Fraud
According to a recent report from the ()* for the &ealth
and &uman Serices -epartment +&SS,, flaws in
electronic health record systems +!&', can also lead to
oercharging. The online surey for this report found
that /0S had proided only limited guidance to
0edicare contractors on !&' fraud ulnerabilities. HSS
officials have issued severe warnings against healthcare
professionals who use web-based medical billing
systems to overbill.
)eal *ife Cases of Medical Billing Fraud
1. 'eport from the official website of the United States
Attorney$s (ffice 1 !ngage 0edical, the medical
billing group and three other medical practices hae
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agreed to pay a total of 23,345,676 to resole
claims that !ngage 0edical oerbilled for nuclear
stress tests conducted between 8uly 9557 and
0arch 95::. )t is claimed that physicians and
practices hired !ngage to help process billings, and
the company routinely billed 0edicare twice for the
same tests.
2. ;(<*)S;A<-.com reports the case of a <ew =ork
doctor arrested for submitting millions of dollars in
false billings to 0edicare. From 8anuary 95::
through mid1-ecember 95:3, 0edicare was billed at
least 2>? million for surgical procedures purportedly
performed by the doctor.
CM!+ )AC Audits
To reclaim the money wasted and lost, /0S implements
recoery audits or 'A/, to motiate healthcare
proiders to help create and sustain more accountable,
eidence based, and streamlined healthcare serices.
The primary focus of 'A/ auditors or recoery firms is
to identify oerpayment of medical bills. )ndiidual
proiders, hospitals, clinical laboratories, durable
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medical e"uipment suppliers, hospices and home health
agencies hae all been the subject of fraud
inestigations.
0edical @illing Adocates of America +0@AA, has also
issued a free report on the web to educate the general
public on medical bill oercharges and fraudulent billing
practices.
Fraudulent medical billing must be aoided 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, proiding the serice
of experienced medical billing specialists and coders
who can help healthcare proiders aoid billing errors
and adhere to industry guidelines.