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3 medical billing practices that could lead to fraud charges

Apr 11, 2024 | Fraud

Medicare and Medicaid are key government programs that help people access necessary medical care. Unfortunately, the cost to operate such programs is higher than it needs to be in part because of fraud. Government organizations often prioritize tracking down and prosecuting cases involving fraudulent billing practices. Despite the social focus on the idea that people who don’t qualify for benefits receive care they don’t deserve, the main sources of Medicare and Medicaid fraud are typically healthcare practices and professionals.

Certain billing practices that may seem clever could potentially lead to health insurance fraud allegations against practice owners, physicians or billing specialists. Yet, the following billing habits might actually constitute insurance fraud.

Unbundling expensive charges

Insurance providers, including federal insurance programs, negotiate specific compensation rates for different types of treatment. Physicians and hospitals receive a certain amount of compensation regardless of what they usually bill for those services. Certain procedures or treatments performed together often have a discounted bundled rate. Intentionally separating the charges to bill for them individually at higher rates is a form of fraud that could lead to prosecution.

Upcoding or upcharging

Factors including how much time someone requires with a physician and the supplies used in their treatment dictate how healthcare providers bill for services rendered. Sometimes, two different types of treatment or two different medical procedures involve the same amount of time and the same tools. Inputting the billing code for a more expensive procedure to maximize practice profits is fraudulent even if the billing code does accurately reflect the amount of time spent with a patient and the tools a physician used.

Billing for canceled appointments

Some medical practices have late cancellation policies that impose large charges on patients who don’t arrive at their appointments on time. Although individual practices can assess fees and hold patients accountable for them, they cannot bill insurance for care that a patient did not arrive to receive. Billing insurance as a way to recoup lost revenue due to scheduling issues is illegal and could lead to fraud allegations.

Any of these relatively small operational choices can have catastrophic consequences for the healthcare provider and support professionals involved. Learning about billing practices that cross the line and become Medicare or Medicaid fraud can help people avoid prosecutable professional mistakes. Those accused of misconduct may need to learn more about the rules to better prepare an effective defense strategy.


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