It is without a doubt that medical billing fraud and abuse have been noted as an international challenge for the healthcare industry. In a survey, 3.6 trillion dollars are incurred for health care costs. According to the U.S. government, there’s been an exponential increase in the amount spent on medical billing services due to fraud. Billions of dollars are claimed for fraud by the people. Insurance companies are one the most important parties that are affected by healthcare provider fraud. In addition, it is leading to build a serious threat that disrupts the global economy.
To summarize, rules and regulation is one of the many reasons to detect billing fraud in healthcare due to its long billing formalities, ambiguity, and complex procedures.
In this article, we will discuss deeply about medical fraud and abuse and try to understand the difference between fraud and abuse in medical coding services by healthcare providers.
We will dig deep into the classification of billing frauds and abuses, Furthermore, we will discuss strategies for the detection and prevention of these challenges to overcome them in the future.
Understanding the difference between Fraud & Abuse in Medical Billing & Coding
The term “Fraud” and “Abuse” are often mistaken same by people in medical billing services as they both represent differently in healthcare. Keep in mind that these acts not only ruin the reputation of the practice but also compromises the patient experience.
1. Medical Billing Fraud
Medical billing fraud is done by health care providers by knowing submissions of claims to government insurers with incorrect information to receive unlawful benefits of payments. With billing frauds, customers are forced to pay for the money robbed from them. Patients need to undergo unnecessary procedures just to gain financial advantage from their medical bills.
2. Fraud in Medicaid and Medicare
Medical billing fraud specifically relates to Medicare and Medicaid benefit systems. It occurs when a healthcare professional fraudulently claims Medicare or Medicaid healthcare reimbursements for which they are not eligible.
Detecting Medical Billing Fraud
Here are some factors that you need to look out for if your healthcare providers are involved in medical billing fraud:
- Misrepresentation of services provided.
- Billing for items and services that have not been rendered
- Billing for services that have not been documented properly
- Unnecessary billing for services and items medically
- Billings for the same services but are multiply claimed.
- Paying referrals for beneficiaries in Federal Healthcare.
Healthcare Practioner Billing Fraud
Among the ways physicians and other healthcare practitioners conduct healthcare fraud are:
- Prescription of superfluous prescriptions that are reimbursed or subsidized by healthcare to resell them on the black market at higher costs.
- Multiple filings of the same claim
- Submitting claims for medical services that were never rendered (“phantom billing”)
- Providing incorrect information such as identities, dates, and service descriptions
- Changing medical records
- Billing incorrectly for a service that is not covered by insurance
- Including unneeded treatments, procedures, or diagnoses to boost the claim amount
- Making use of a commission mechanism among members
- Members are exempt from co-pays.
Types of Billing Frauds
1. Upcoding
Upcoding is commonly the most common fraud in medical coding services. It’s when a provider sends a bill for more expensive services than the service which was performed. The provider might:
- Overstate the time for the procedure to form
- Lie about performing the procedure by blaming the staff
- Bill you for the procedures that you may not need necessarily
2. Phantom Billing
Phantom billing is when your provider bills you for services that were never performed. This leads to patients paying for services that were never done by their physician.
3. Kitchen Sink Coding
This type of fraud includes the overuse of medical codes. Providers use the code for diagnosis as well as an additional diagnosis in medical bills.
4. Service Unbundling
Service unbundling refers to restricting patients from benefiting from their packages and the provider bills you individually for the services.
5. Self-Referrals
This type of fraud occurs when a doctor or surgeon advises a patient to have testing or surgery but then offers to administer the procedure or refers the patient to another doctor for whom he receives compensation.
6. Cloning
Cloning is done when the health records of one patient are copied for another patient to reduce time. This leads to a huge misunderstanding in medical bills.
7. Downcoding
Downcoding is overcharging for services in medical bills even when a patient shows full recovery but
the hospital insists you extend your stay.
8. Canceled services
Patients should check that bills are filed for services that were rendered rather than services that they had canceled.
Billing Fraud Prevention
- Identification of potential fraudulent practices
- Implementation of Advanced Data Analytics
- Keep a good understanding of current health regulations
- Implement good data security practices
- Audit your billing process properly
- Avoid conflicts of interest
Coding Fraud
By willfully submitting claims for payment to Government insurers with erroneous billing codes, diagnostic codes, units of service, dates of service, or service providers, healthcare providers can violate the False Claims Act.
When a physician or dental healthcare professional offers dental services to a patient, the service or procedure is invoiced using a specific code known as a “CPT code” (Current Procedural Terminology). A dental billing company plays a crucial role in this process by handling the billing and coding tasks for dental practices.
When an established patient visits a dentist’s office, for example, the dentist or their staff will take a dental history, conduct an oral examination, and provide a diagnosis involving various degrees of dental sophistication.
Requirements for an Effective Fraud Detection and Prevention System
A thorough system to identify and stop the payment of false, inflated, or fraudulent claims must combine the following elements:
- Medical insight and analysis
- Financial analysis
- Business/relationship analysis
- Recognition of evolving behavior
Medical Billing Abuse
Billing abuse refers to behaviors that may result in undue costs to the patient’s medical bill, either directly or indirectly. Billing abuse covers any practice that fails to deliver medically necessary services to patients or fails to fulfill professionally acknowledged standards of care.
Detection for Billing Abuse
- Billing for unnecessary services is an example of healthcare fraud.
- Excessive charging for services or supplies.
- Misuse of codes on a claim, such as upcoding or unbundling codes. When a provider gives an incorrect billing code to a medical operation or treatment to boost reimbursement, this is known as upcoding which we have discussed above.
Medical billing abuse can potentially subject providers to criminal and civil penalties. Program integrity encompasses a variety of initiatives aimed at addressing various causes of erroneous payments.
Prevention for Billing Abuse
- Well-distributed written conduct standards to promote the hospital’s commitment to compliance.
- Implementation of training for staff’s well-awareness.
- Maintaining to receive billing abuse and reports to protect anonymity and whistleblowers from retaliation.
- Auditing and evaluations to track compliance.
- Investigating systematic problems.
Laws for Billing Fraud and Abuse
There are laws for individuals or entities that commit fraud and abuse in medical billing and healthcare services. Violations of these statutes may result in claim nonpayment, Civil Monetary Penalties (CMP), expulsion from all Federal health care programs, and criminal and civil punishment.
Some of them are mentioned below:
- False Claims Act (FCA)
- Anti-Kickback Statue (AKS)
- Civil Monetary Penalties Law (CPM)
- United States Criminal Code.
Also read: The Future of Telehealth: How Technology is Revolutionizing Healthcare
