Inclusion of services never delivered is one kind of medical billing fraud. A doctor's office, for example, may bill for a blood test that never occurred, or a pharmacist may bill for medicine that she did not provide. More typically, health-care practitioners participate in a practice known as upcoding, which implies charging more than what was actually provided. For example, a physician may charge $10,000 for a knee replacement when it was really a splint to be used until future surgery can be performed. Upcoding can also include the opposite: billing for services not rendered.
Some forms of medical billing fraud involve individuals who submit false claims for reimbursement. This may be done by individuals who attempt to pass off unlicensed providers' signatures as those of licensed physicians or surgeons. It may also be done by individuals who submit false claims for services that were not actually provided. Some common types of fraudulent billing practices include:
Misrepresenting the identity of the physician who signed a claim form. For example, if Dr. Smith signs every order for a procedure but then an individual submits these orders under his name, this would be considered misrepresentation.
Submitting claims for services that were not provided. For example, a patient goes into a hospital for emergency surgery and during that time doctors try different treatments with no clear winner.
Medical professionals, healthcare institutions, patients, and others who pose as one of these parties can all conduct Medicare and Medicaid fraud. Billing for services that were not performed, running unneeded testing, and obtaining benefits when you are not qualified are all forms of fraud. A fraudulent act may involve the filing of a claim, the submission of false information, or any other action that violates federal law.
Here are some examples of how medical professionals can engage in Medicare fraud:
A doctor bills Medicare for services that were not provided. This is called "upcoding." The doctor adds codes to an invoice that indicate a more severe illness than what the patient actually had. By doing this, the doctor can make more money. If questioned, he or she could say they did not provide all the services listed on the invoice. Instead, they only provided the most essential tests required by Medicare guidelines.
An individual or company hires a medical professional, such as a doctor, nurse, or therapist. They tell the contractor they want to receive payment from both Medicare and Medicaid. However, once the contractor performs services for them, they do not pay the bill. The contractor conducts this type of activity because it can be difficult to get paid by Medicare or Medicaid. If caught, they could face criminal charges.
A medical professional accepts billing privileges at multiple hospitals.
Filing claims for treatments or prescriptions not obtained; faking or manipulating invoices or receipts; and using someone else's coverage or insurance card are all forms of consumer health care fraud. Health care fraud destroys the trust foundation of the health care system and undermines the ability of consumers to receive high-quality care at a reasonable cost.
The amount of health care fraud in the United States is unknown, but it is believed to be huge. The government estimates that it costs society between $50 billion and $80 billion per year. That means health care fraud has a direct impact on the federal budget that approaches $100 billion annually!
Medical fraud can take many forms. Here are just three examples: a physician bills for services not provided, charges an excessive fee, or uses false records to submit claims to insurance companies. These practices can occur within an individual practice area (such as orthopedics) or across multiple specialty areas (such as internal medicine and podiatry).
Health care fraud is a serious problem that has been around for decades. However, it has become much more common recently due to financial incentives within the system. For example, doctors often have little reason to question whether a patient needs a particular test or treatment.
If a provider bills Medicare for services you never got, they are committing fraud. Bill Medicare for services that are not the same as the ones you received (usually more expensive). After you have returned the leased medical equipment, Medicare will continue to cost you for it. This is called "upcoding" or "over-billing." Providers do this to make more money.
Medicare pays much less than what providers charge for their services. If you use your own doctor instead of going to a Medicare Advantage plan's network hospital or clinic, you will probably have to pay out-of-pocket for some services. However, this does not mean that your doctor is trying to scam you. They just can't afford to accept all Medicare patients. Some conditions require special training to treat, such as neurology or internal medicine. These types of doctors may only be able to offer certain tests and treatments because they are not routinely trained in other areas of medicine.
For example, a neurologist might be able to diagnose dementia by looking at your brain tissue under a microscope but wouldn't be able to cure it with a prescription drug. They would also need training in physical therapy to properly handle a patient with muscular dystrophy who cannot move their limbs voluntarily. Because these types of specialists do not practice every day like general practitioners, they may not have time to see all their patients thoroughly.
Patients typically perpetrate health insurance fraud by fabricating or modifying paperwork, concealing pre-existing diseases, or neglecting to submit information. Medical professionals can conduct health insurance fraud by filing fraudulent claims, invoicing for services or supplies that were not rendered or supplies that were not utilized, or modifying existing claims. Physicians can also engage in health insurance fraud by prescribing unnecessary medications or treatments.
Health care fraud is the misuse of health care programs by anyone, including doctors, nurses, pharmacists, hospitals, insurers, and individuals with access to medical records. The three main types of health care fraud are billing fraud, drug trafficking, and money laundering. Billing fraud involves submitting false claims for services not provided or based on falsified bills of materials. Drug trafficking occurs when physicians prescribe more drugs than they intend to dispense. Money laundering involves moving illegal funds through legal channels.
Billing fraud is common among doctors who participate in fee-for-service practices or who have large patient populations. They may overbill patients or use code words during phone calls to conceal their identity. Doctors can also sign up patients without their consent, bill for services not rendered, or charge excessive fees. These practices violate the Health Insurance Portability and Accountability Act (HIPAA) of 1996 and are punishable by fine or imprisonment.
Drug trafficking is common among doctors who make house calls or provide emergency care at home.
Members can conduct health care fraud by giving false information when enrolling for programs or services, forging or selling prescription prescriptions, misusing transportation benefits for non-medical purposes, and lending or using another person's insurance card. Medical fraud can also involve the submission of fraudulent claims for reimbursement.
Fraud can be committed by employees, contractors, or agents of a hospital, physician group, or other healthcare provider. Employees may include receptionists, billing clerks, pharmacy technicians, and others who have access to personal information about patients. Contractors and agents are responsible for conducting investigations into complaints against providers, reviewing bills for accuracy, and other tasks related to the prevention of health care fraud.
Medical fraud involves the intentional submission of false claims for payment to government agencies such as Medicare or Medicaid. This can result in loss of funds paid out under those programs. It can also involve the misuse of health care coverage for personal gain. For example, someone might claim excess charges on their own bill after being treated by an expensive doctor. These excess charges could be claimed as a tax deduction by the patient.