Billing Fraud in Healthcare- What is Medical Billing Fraud?

Medical Billing fraud comes in many shapes and sizes, but, at its core, it involves a healthcare provider submitting claims and receiving payment for procedures and services when the provider is in fact not entitled to such payment. Billing fraud affects every type of healthcare provider, including hospitals, nursing homes, independent physicians, and pharmacies, to name a few. The False Claims Act permits whistleblowers to sue providers who defraud Government insurance programs, such as Medicare, Medicaid, and TRICARE. If the provider is located in California or Illinois, whistleblowers can also sue them for committing fraud against private insurance carriers.

Billing for Services Not Rendered or Not Medically Necessary

The most straightforward type of billing fraud occurs when a provider bills patients’ insurance for procedures that were not performed or not medically necessary. For instance, a doctor may claim to have seen a patient in person even though the patient never showed up for the appointment. Alternatively, the doctor may perform ultrasounds and x-rays reflexively on every patient, regardless of medical need. If either provider then billed those claims to Medicare or Medicaid, they would be committing fraud.

For a related type of Medicare fraud, see our article on Upcoding.

False Certification

The second type of billing fraud is called false certification. To qualify for payment from Government insurance programs, the provider must certify compliance with all applicable laws and regulations, such as state licensing/accreditation requirements and the Medicare and Medicaid conditions of participation. Each type of provider has different requirements to be qualified to bill for services, such as:

  • Hospitals must be properly licensed by their states and/or accredited by an accreditation agency.
  • Clinical labs must be licensed under the Federal CLIA regulations.
  • Outpatient and ambulatory surgery centers must strictly follow the conditions of coverage in the Medicare regulations.

If providers certify compliance with these requirements when they are not in compliance, they may be liable under the False Claims Act.

However, one caveat with false certification claims is that a whistleblower must be able to demonstrate that any alleged violation, if known by the insurance carrier, would have resulted in the denial of payment. Generally, insurance carriers will give providers a chance to cure violations before terminating payments. Thus, a whistleblower will have to demonstrate either that the provider was unable to cure the violations, or that the violations were so serious that insurance carriers terminated payments immediately, without an opportunity to cure them.

How to Report Medical Billing Fraud?

Whistleblowers have over the years helped the government recover billions of dollars by reporting healthcare misconduct like medical billing fraud.

You as an insider witnessing medical billing fraud at the hospital, physicians office, nursing home or any other healthcare service provider, aid with uncovering those who undermine the system and put lives at risk. If you blow the whistle the right way, you can provide an important public service and win a whistleblower award that’s a percentage of the potentially millions of dollars recovered by the government. If you blow the whistle the wrong way, your case could be over before it begins. Contact us at Brown, LLC today to discuss your case confidentially at (877) 561- 0000.