What Is Medical Billing Fraud?

Medical billing fraud is commonplace in every area of the health care industry. The stories that make the headlines are unfortunately the tip of the iceberg.

Misconceptions

Fraud and abuse are use interchangeably by many people. The difference between the two is intent. Fraud is done with the knowledge that is it wrong, while abuse occurred unknowingly and without malice.

Effects

Medical billing fraud costs taxpayers and medical providers millions of dollars annually. Eliminating fraud and abuse could mean the difference in a patient receiving care.

Prevention/Solution

Medical billers are proactive in preventing fraud by creating a uniform checklist to follow whenever a claim is submitted. When possible, it is a good rule of thumb to have one person submitting claims and another posting payments, adjustments and credits.

Types

Upcoding and downcoding are two forms of medical billing fraud. Upcoding assigns a diagnosis that warrants a higher reimbursement than medically necessary. Downcoding does the opposite and inaccurately reports a lesser diagnosis, often to show fraudulent patient improvement.

Expert Insight

The Office of Inspector General in the U.S. Department of Health and Human Services has a division that focuses on fraud and abuse in medical settings. The OIG offers compliance recommendations to sectors of the health care industry to promote self-assessment and avoid fraud.