Health care billing fraud explained

Medical procedures often result in considerable expense due to the number of people involved in providing service and the complicated nature of the health care billing system. During the billing process, mistakes can easily happen in such a complex system. However, not all accidents are innocent. Sometimes billing errors can escalate to health care fraud and abuse. Health care billing fraud is a serious issue that medical professionals should learn how to identify and avoid in their practices.

Examples of billing fraud

Health care providers commit billing fraud when they intentionally manipulate the insurance coding and billing system to their advantage. One example of billing fraud is sending bills to patients for services that are more expensive than the services they required. This fraudulent practice is upcoding. Billing fraud can also occur when a health care provider submits the same bill multiple times to the insurance company when in fact the provider only performed the procedure in question once. Insurers and providers may feel tempted to take advantage of the reimbursement system because of its complicated nature. Medical providers may attempt to increase their profits through a technique called unbundling, in which billing happens at each stage of a medical procedure as if it were a separate procedure rather than a bundle.

Protection against unintentional fraud

Providers can avoid medical coding errors in-house by outsourcing billing services and hiring fully trained, competent billing staff. Implementing internal procedures helps to detect claim issues. External auditors and cross-checking forms serve as checkpoints pre-submission. In the long run, taking these extra precautions is beneficial as the consequences of billing fraud, whether intentional or not, are severe. Health care providers who bill fraudulently open themselves up to significant fines, criminal or civil penalties and loss of their licenses. The whole practice can go out of business if it cannot survive the financial impact of these consequences.