Understanding medical billing fraud

On Behalf of | Aug 14, 2023 | White Collar Crimes |

Medical billing fraud is a complex and costly issue affecting doctors, patients, health insurers, and the government. Millions of dollars are lost annually, and it drives up insurance costs.

Understanding what constitutes fraud is imperative to protecting everyone’s interests.

Different types of fraud

There are several different ways to commit medical billing fraud, which usually involves making changes to coding. Here are some of the common types:

1. Billing for unnecessary services

This practice involves providing or billing for medical services that the patient doesn’t need, such as hospital admissions, diagnostic tests, lab work, medications or treatment. The purpose is to receive increased reimbursement from insurance companies, Medicare or Medicaid.

2. Billing for services not furnished

Billing for services not rendered involves charging for medical services, procedures, or supplies that were never actually provided. 

3. Upcoding

Upcoding is the practice of a healthcare provider coding for more expensive procedures than the one that was provided in order to receive more reimbursement monies.

4. Unbundling

In healthcare, the term unbundling refers to the practice of taking a group of procedures that are under a single code and separating them out to be billed under their individual codes. When they are billed as separate procedures, there is typically higher reimbursement.

A healthcare provider can be prosecuted for fraudulent billing practices under several laws, including the False Claims Act (FSA). This law imposes liability against anyone who defrauds a government program, such as Medicare or Medicaid. Accusations of fraud should be taken very seriously as they may involve criminal and civil penalties, along with losing the license to practice – even if the billing errors were really just simple mistakes.