10 Unethical Medical Billing Practices You Should Monitor and Report

Here in this article, we will discuss the unethical aspects of medical billing practices. Let ZMB boost your savvy about frauds in Medical Billing you should monitor carefully and Report.

Professionalism in healthcare has uttered that healthcare providers work under a special code of ethics, which is different from many other industries due to the prime responsibility to be dedicated to the well-being of patients. In modern-day, healthcare practices these principles can appear to be at odds where financial concerns are inextricably connected to the capacity to treat patients. Out of most honest healthcare providers, few of them want to illicitly increase their bank accounts size.

The healthcare services providers claim the reimbursements on successful completing. Every procedure performs by a health care provider has a billing code. This code is called the Current Procedural Terminology (CPT). CPT determines how much your provider will be paid. Service providers use these codes while submitting claims to insurance companies. When providers use the correct codes for the procedures done, they get paid what they are due. But by using different codes, they can get paid different amounts of money.
Medical billing fraud refers to upcoding and intentionally manipulating medical billing claims to betray the payers. In recent years, health care fraud has become a major issue, because of the increasing healthcare cost, the rise of private “whistle-blowers,” and change in the concept of fraud to include a developing concern about quality care.

Medicare fraud is one of the fastest-growing crimes in the United States. Every year number of service providers have been accused of healthcare frauds that cost billions. Previous year over 600 individuals were forfeit for healthcare fraud in the U.S involving over $900 million in false and unethical medical billing practices.

The violations of health care fraud laws lead to serious consequences that comprise:

  • imprisonment and fines
  • civil fiscal penalties
  • loss of licensure
  • loss of staff privileges
  • elimination from involvement in federal health care programs

So, ethical and legal violations can land an offender in hot water. Now let’s discuss the unethical billing practices you should monitor and report. Top 10 unethical medical billing practices are:

Upcoding

The first thing to know here is, what upcoding is? Upcoding is an illegal billing practice by which extra CPT codes are added to the reimbursement claims and are submitted for the services that were not made. There are many ways by which health care providers can fraudulently get the reimbursements, causing enormous damage to the healthcare industry and payers.

By using codes for more serious procedures with a higher payment, providers can significantly increase how much they are paid. The health care provider submits exaggerated bills to payers with procedure codes that were never performed or include unnecessary procedures that were never required to treat the injury. The doctor or other health care provider provides a service but lists a billing code for a procedure that pays high.

For instance, sometimes a patient goes for a therapy session and the medical claim was up-coded to complete medical treatment. Similarly, routine medical transportation could be coded as emergency life support transportation. Or a cold coded as pneumonia.

In the case of illegal, fake billing, one should ask the health care provider to rectify the charges instantly. Because these up-coded medical bills sometimes slip through the insurance carrier checks but mostly it can cause objection to payment.

Duplicate charges

A duplicate charge is also a form of overbilling. It means when one provider billed twice for the same procedure or when two providers charges for the same single procedure. For example, if a glucose test was given to you, and the doctor and nurse both noted that then the billing section might issue two separate bills.
In such cases go directly to your medical provider and ask for corrections. In case you’re being billed by an outside billing company (more common and affordable nowadays), call the doctor to communicate with their medical billers on your behalf to make corrections.

Phantom charges

The most common type of medical fraud comprising almost half of all health care provider cases is phantom billing. Phantom billing is sending bills by a medical provider to Medicare for procedures, kits, and services that were either not performed or were not needed.
The US spent $3.6 trillion on medical care in 2018. This accounts for almost 18% of GDP. Medical providers seek reimbursement for services and prescription drugs by billing the government’s Medicare, Medicaid, and Tricare programs. Experts believe that almost 10% of these medical bills contain some sort of fraud like phantom billing.

Unbundling

Unbundling may refer to the separation of charges that should have been billed under the same procedure code.
Unbundling is using multiple CPT codes instead of using a single code that captures payment for the parts of a procedure, either due to misunderstanding or to increase payment.

This type of mistake can be tricky to identify unless you’re a certified medical bill coder.
Sometimes it happens that some medical services are billed together which costs less. For example, treatment of fever, cough, and cold billed together. Unbundling is a process where instead of one code, three separate bills are submitted for each procedure using three separate codes for fever, cold, and cough.

Nowadays, in the U.S most healthcare providers use billing software or an EHR system. It integrates with medical billing and credentialing services software capable of warning the provider to detect duplicate services or procedures.

Incorrect quantities

What if an extra “0” placed at the end of a number by the billing department?

“Yes”, the mistake could be as simple as this. So, make sure that you weren`t charged extra because an unethical medical biller could charge extra by incorrectly inflating the number of items or medications.

Medical equipment frauds

It is a very common sort of intentional act in medical fraud on the part of the healthcare provider. Durable medical equipment (DME) refers to the healthcare devices that are important for a patient’s treatment. It includes equipment like a private bedroom, mobility scooters, motorized, etc. The wheelchair scam has been widely reported.

The provider bills for devices and equipment that the patient has never received. In this way, the healthcare providers distract the funds to their wallet. Medical equipment frauds are one of the major types of illegal billing practices that cost the government’s main health care assistance program millions of dollars.

Misrepresenting service dates or locations

Healthcare providers or clinics sometimes represent incorrect, improper, or false records of services. This happens in the following ways:

Misrepresenting Dates of Treatments

Such false claim violation occurs when fewer visits occurred but offices submit claims for multiple visit dates. This is to create more billable events. Multiple services are provided to the patient in just one visit.

Misrepresenting Location of Services

In this false claim violation, medical providers make claims of services given at their clinics. But actually, the treatment might have conducted outside the clinic.
The Medical provider knows by claiming the service took place on separate dates and locations they can make more money.

Medicare fraud and abuse

Medicare is a Federal health care plan funded through payroll taxes for people over the age of 65. In the False Claims Act, the violation needs to be against a Federal or State Healthcare Program for Reporting healthcare fraud and abuse.

Medicare fraud and abuse happen when someone betrays Medicare by:

      • Using other Medicare card/number.
      • Billing for services not received
      • Billing for services different from those that are received.
      • Billing for rented medical equipment after the return.
      • Perform unnecessary services

Waiving of deductibles or co-payments

Although it may seem harmless to fulfill a waiver request the law is clear that physicians can only waive co-payments and/or deductibles in a limited situation. But routine waiver of co-payments and deductibles may be considered fraudulent in most government health care plans and insurance companies.

The basis is that if patients have to pay something to see doctors, they’ll only seek care if they need it. It is also a way to balance some of the expenditures. Regardless, some providers submit false claims to insurance companies after waiving patients’ deductibles or co-payments.

Billing Services not provided

Claiming for the treatments that were not performed. Medicaid and Medicare only reimburse for approve procedures. In this case, the provider cannot bill for tests and treatments which are not approved.
However, by manipulating the diagnosis, healthcare providers add procedures that were not essential and were provided only to increase reimbursements.
These are common unethical medical billing practices and is a serious violation of the healthcare act. It often goes unnoticed, since many patients don’t examine their EOBs and bills closely.
So, in such case call the doctor’s office for correction. If, they’re unwilling to correct it, then report them to your insurance company.

How to Monitor and report Abuse

Medical care fraud and abuse can lead a service provider to criminal and civil accountability. Although intentionally committed frauds are impossible to stop, there are certain internal and external systems and processes that can be executed to better detect and deter future fraud and abuse.

One can monitor and report fraud and abuse in billing claims by:

        • Training and education
        • Executing computer-assisted coding.
        • Validating members’ ID cards before render services.
        • Confirming accuracy while submitting claims.
        • Avoid unnecessary prescription/treatment
        • Contacting appropriate Compliance Departments for reporting all suspicions of fraud.

Outsourcing medical billing can significantly reduce billing and coding errors. It saves time and money in addition to improving patient satisfaction with accuracy in medical bills. Medical billing companies ensure that there are no coding errors before submitting which reduces denial risks and speeds up payment.
Having expertise is essential to build patient trust and stay compliant with evolving healthcare industry regulations.

Frequently Asked Questions

When medical professionals or billing departments take actions that lead to patients being overcharged or treated unfairly, this is known as unfair medical billing practices. This includes balance billing in which patients are charged the difference between what their insurance pays and what the provider charges and surprise billing in which patients get unexpected charges from out-of-network providers. To identify those unfair billing first of all take a close look at your medical bills, compare the amounts charged to the explanation of benefits (EOB) provided by your insurance company to identify any unusual or unexpected charges. Get further information from your insurance company or healthcare provider if something appears strange or confusing.

Unethical billing practices involve deceptive or morally questionable behaviors by healthcare providers or billing companies that mislead a payer and resulted in the form of overpayment that included fraud. This include:

  • duplicate Claims: Issuing charges for the same treatment or test more than once to a patient or their insurer.
  • Code Inflation: Applying a code for a more costly service than what was actually provided to increase the bill.
  • Phantom charges: Listing fees for procedures or services that were never rendered to the patient.
  • Code Fragmentation: Separating charges that should be combined under one comprehensive code, resulting in a higher total bill.
  • Quantity Discrepancies: Billing for a greater number of supplies or medications than were actually given to the patient.
  • Equipment Charge Fabrication: Requesting payment for medical devices or equipment that the patient never received.
  • Falsifying Timelines and Locations: Incorrectly documenting the dates or places where medical services were provided.
  • Deductible Forgiveness: Not collecting required copayments or insurance deductibles from patients.

Illegal billing practices include things like creating fake patient records, overcharging for treatments, and illegally invoicing for services that were never rendered. These are acts that go against the law or rules. These behaviors are prohibited by healthcare standards and have severe legal ramifications. Recognize that medical billing entails criminal activity. to identify those illegal bills, pay attention to items like invoices for services you did not receive, multiple bills for the same service, or expenditures that are considerably higher than normal. If you think there are inappropriate behaviors, ask legal or medical billing professionals to do more study.

If you encounter unethical billing practices, follow these steps:

  • carefully review your healthcare statements and ensure they align with your Explanation of Benefits (EOB).
  • If you need clarification or a correction, get in touch with the billing office of your medical service provider.
  • If you face discrepancies, report them to both your insurer and the relevant medical oversight board.
  • For advice on possible legal steps, consider consulting a lawyer who specializes in healthcare law.

To report unethical billing practices, you can:

  • Inform your insurance company of the unethical action so they can do more investigation into it.
  • Every state has medical boards that oversee medical practices and have the power to investigate complaints.
  • The OIG accepts reports of unethical behavior and healthcare fraud.
  • To learn about other alternatives and perhaps begin legal action, see a healthcare provider for legal advice. 

Reporting unethical billing practices can result in institutional improvements to stop such incidents in the future, investigations, legal action against the people responsible, and compensation for the harmed patients. Additionally, it supports the integrity of the medical system.

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