Fraud in medical billing and coding costs billions of dollars to governments and insurance providers each year and significantly increases the cost of healthcare services in the United States.

According to the National Health Care Anti-Fraud Association, healthcare fraud costs around $68 billion annually to the American people, about three percent of their $2.26 trillion in healthcare spending.

Every year, hundreds of providers are charged for fraudulent and unethical practices in different states, and there is no end to it.

Actually, fraud in healthcare is prevalent just like in any other industry. There are countless ways where fraudsters can trick the system in their favor to maximize their profits.

Common Medical Billing Frauds

There are various types of frauds rife in the healthcare industry today and occur in many different settings. Some of the common medical billing frauds include:

Billing for Services Never Rendered

Healthcare providers are only paid for medical treatments and procedures that are actually performed. Both Medicaid and Medicare can provide reimbursement for the procedures, tests, and treatments they are authorized to perform. Therefore, healthcare providers cannot bill for services outside the scope of their authority.

Many providers may manipulate the diagnosis of the patient to recommend procedures and tests that were not even necessary, like Magnetic Resonance Imaging (MRI), prescription drugs, and X-rays, in order to increase their reimbursements.

Upcoding

Upcoding is one of the most common types of illegal billing practices. It happens when a provider exaggerates the severity of the condition of their patients in order to fraudulently obtain a higher reimbursement.

A physician does so by submitting Current Procedural Terminology (CPT) for a more serious, complicated, and expensive procedure than actually performed.

For instance, a provider submits the claim of a patient who has undergone a minor chest procedure therapy as an open heart surgery because it provides a higher reimbursement.

Another form of upcoding occurs when a patient receives a brief consultation from a nurse, but the healthcare provider submits a claim with a doctor for a higher fee.

Since large insurance companies manage a large caseload from hundreds of providers, most of the fabricated claims often go unnoticed.

Service Unbundling

Service unbundling is another common type of billing fraud. It happens when two or more procedures meant to be invoiced in the same package deal are billed separately in order to generate a higher bill.

For example, if a patient is being treated for cough, cold, and fever, the bill should be all-inclusive. However, the provider can bill each procedure of the testing separately using three different codes.

Duplicate Billing

Duplicate billing, sometimes also referred to as double billing, occurs when a provider attempts to bill more than once for the same service. It typically involves sending a bill to Medicare or Medicaid and either the patient or a private insurance company for the same treatment.

According to experts at Marvelous Medical Billing, double billing also happens when the same recipient is asked for the payment by two providers for the same procedure on the same date. It also occurs when two providers bill the same procedure or treatment both as an individual and bundled code.

Since the insurance providers process hundreds of thousands of computerized bills on a daily basis, it is not easy for them to identify every case of duplicate billing.

Billing for Fictitious Services

This is another common medical billing fraud. It happens when a provider bills for the procedures and treatments that were not actually provided at all. Providers usually purchase the private information of real people from internet hackers to create fake patients and add them to fabricated bills for fictitious services.

Medical Equipment Fraud

Medical equipment fraud is another rapidly growing healthcare fraud. It happens when a provider bills for medical equipment and devices that the patient has never received.

Scams involving an expensive type of power wheelchair are particularly rife, while mobility scooters are also popular in such frauds.

Billing for Non-Covered Services/Items

There are several services and items that are not reimbursable by both government and private insurance providers. Providers may label non-covered services and items as covered in order to obtain reimbursement they are not entitled to.

Final Words

Like any other industry, the potential for corruption and fraud in the healthcare industry is great. Since these frauds occur on a broad scale, it is hard to detect and prevent, and it is the taxpayer who has to bear the burden.

Most healthcare providers are honest and committed to serving to the best of their integrity. However, a few providers take advantage of the loopholes in the system for financial gains. Performing unethical and fraudulent medical billing practices is a serious crime that can trigger fraud investigations and may lead to civil suits and criminal charges, resulting in a loss of professional licenses and a prison sentence.

Providers need to hire qualified professionals to perform billing activities and conduct regular audits of the billing procedures and records to prevent any fraudulent activities. Furthermore, a cross-comparison of the bills should be carried out with corresponding medical records before they are submitted to the insurance companies for reimbursement.

Responsibility also lies with the patients to carefully read their medical bills and explanation of benefits summary and reach out to their provider or insurance provider if they notice any unrecognized procedures, mistakes, overcharges, or double charges.

Marvelous Medical Billing: Your Trusted Medical Billing Experts

Marvelous Medical Billing is a Medical Billing Services Company that offers a full range of fully integrated revenue cycle management solutions to help healthcare providers minimize their expenses, reduce claim denial rates, and improve their productivity, efficiency, and profitability.

Whether you are a sole practice or a group with multiple specialties, we can devise customized solutions that cater to your specific billing needs.

So while you focus on taking care of your patients, let us handle all of your back-office operations and help you improve the financial health of your practice and turn it into a successful business enterprise.