Medical billing fraud involves false statements in a bill to increase payment, such as services not rendered, upcoding, misstating procedures, unnecessary services, and kickbacks. Patients can avoid fraud by reviewing bills and reporting suspicions to insurance companies and law enforcement.
Medical billing fraud is the inclusion of false statements in a bill presented to a patient or insurance provider for payment. The inflated statement results in a larger payout, unless the customer or the insurance company conducts an investigation and determines that the invoice is fake. This activity is illegal, and government agencies concerned about fraud can investigate healthcare providers accused of defrauding them in order to gather information they can use to prosecute medical billing fraud. This information can also help with identifying fraudulent billing patterns in the future.
An example of medical billing fraud is the inclusion of services that are never rendered. For example, a doctor’s office might bill for a blood test that was never done, or a pharmacist might bill for medications they didn’t dispense. Most commonly, healthcare providers engage in an activity called upcoding, where they upgrade the services they provide to a billing code that results in a higher payment. For example, a patient might arrive complaining of seasonal allergies and the bill will state that the patient was seen for asthma.
Physicians can also misstate the nature of a procedure so that it qualifies for insurance coverage. Insurance companies usually don’t cover voluntary medical procedures like cosmetic surgery. If the surgeon can find a similar covered procedure, he can swap billing codes, committing medical billing fraud to get the insurance company to pay for the surgery. For example, if a patient has cosmetic surgery to change the texture of their eyelids, the doctor might bill it as one surgery needed to treat droopy eyelids.
Unnecessary services are also part of medical billing fraud. Doctors may order additional tests or procedures to inflate the bill. They may also accept kickbacks for referrals or make false referrals to healthcare providers with the goal of overestimating the practice’s statistics. For example, a patient who attends appointments at a pediatric practice might receive a “referral” to a study partner. This allows the practice to inflate insurance bills.
Patients can work to avoid medical bill fraud by carefully reviewing their bills and disputing anything that does not belong to them. They should also ask why a procedure is recommended and can get insight into what would happen if they opted out. Patients may also want to pay attention to discrepancies between bills sent to the insurance agency and what the doctor has actually provided. If medical billing fraud is suspected, patients can report it to their insurance companies and law enforcement agencies.
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