What is Healthcare Fraud?

The majority of healthcare fraud is committed by a small minority of dishonest healthcare providers with the only “red flag” for the government being the aggregate dollar amount. (remember, a medical degree does not confer honesty). Providers who engage in fraud and abuse are subject to sanctioModern medical person inputting diagnosis into an online data basens under a number of federal and state laws whose penalties range from monetary fines and damages to prison time and exclusion from the federal healthcare programs, including Medicaid.

Within the current healthcare system, many factors help these dishonest providers cover up their wrongdoings. These factors include:

  • The sheer size of our nation’s population.
  • Hundreds of medical conditions and treatments on which providers can base false claims.
  • Healthcare consumers who blindly trust their providers and who have little opportunity to manage their care.
  • Ability to spread false charges across multiple insurers simultaneously without being detected.

The most common types of fraud include:

  • Billing for services never rendered.
  • Upcoding, or billing for more expensive services or procedures, than those that were actually performed.
  • Performing medically unnecessary services solely for the purpose of generating extra insurance payments.
  • Misrepresenting non-covered treatments as medically necessary.
  • Falsifying a diagnosis to justify tests, procedures or surgeries.
  • Unbundling, or billing each step of a procedure as if it were separate.
  • Billing a patient for more than a co-pay for services prepaid or paid in full by the insurer.
  • Accepting kickbacks for patient referrals.
  • Waiving patient co-pays or deductibles and overbilling the insurance carrier or benefit plan.

2 thoughts on “What is Healthcare Fraud?”

  1. I am wondering if you have any information about how much of the inappropriate billing is fraud and how much is stupidity or error by improperly trained or careless staff.
    My physical therapy was being covered at 98% between primary and secondary coverage, then one day I was receiving bills o’ plenty with no coverage from my secondary due to “limitation on this kind of coverage.” When I checked with insurance I asked them to compare the codes to prior months as the treatment had not changed. Yes, new employee misread my physical therapist’s handwriting instead of also looking at my patient history. So in this case I would have had to pay for treatment that should have been covered. Fortunately I keep track of the bills in my control. But as I have learned from you, now I also must keep track that my money paid out to docs is not being accurately reported. Thanks!

    1. There are 2 types of billing errors.

      The first is an error of “translation” of your therapist’s office visit note into the universal numeric/letter code or language used to communicate to your third party insurer what level of service for which diagnosis occurred. This type of error can be corrected because it is amenable to review or audit at a later date. This type of error is what insurers look for in a “post-payment review”. This is what seems to have happened to you.

      The second error is falsification bu the provider of his office visit note, usually that is recording as having occurred discussions of symptoms of parts of the body (heart, lung, stomach for example) or examinations of parts when they did not occur. His goal might be to give the impression of having done more work than actually occurred and thereby justify a larger monetary payment. His goal might also be to give the impression of having complied with a hospital policy or procedures when he had not. The garden variety post payment review can not detect this type of error. The problem is similar to that occurring when a law enforcement officer has a version of evnts which differs from that of an involved citizen. Before video lapel or dashboard cameras entered the picture the situation was the word of the citizen vs the word of the cop; the cop was always right.

      The stories posted in late September 2016 through mid-October 2016 are of falsification. There are a paper trails. Only a trained professional would ever have connected the dots.

      The purpose of the blog section titles Parsing The office Visit Note” and similar information posted in early 2017 is intended to give empower individuals to make their own notes about what occurred. The procedure for a patient to get his record amended needs to be simplified. At present it is the word of the patient vs the word of the medical provider; the provider prevails. Tell your politicians the playing needs to be level.

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