Differentiating Between Improper Payments and Medical Billing Fraud

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Differentiating Between Improper Payments and
Medical Billing Fraud
Medical practices sometimes equate improper
payments with medical billing fraud. Improper
payments could be unintentional where your
received payment even after not meeting program
requirements. While medical billing frauds are
intentional where practices might through
up-coding and unbundling try to receive more
insurance reimbursements than allowed. For
differentiating between improper payments and
medical billing fraud, lets begin by defining
improper payments. Improper Payments Improper
payments represent payments that do not meet
program requirements. The vast majority of
improper payments occur in situations where there
was an unintentional payment error or a reviewer
cannot determine if a payment was proper due to
insufficient payment documentation from a state,
or a provider. Improper payments do not
necessarily represent expenditures that should
not have occurred and can include both
overpayments and underpayments where there is
insufficient documentation to determine if a
payment is proper in accordance with program
payment requirements. While fraud and abuse are
improper payments, not all improper payments
represent fraud.
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Differentiating Between Improper Payments and
Medical Billing Fraud
For example, a majority of improper payments are
due to instances where the information required
for payment was missing, documentation that an
eligibility determination was made correctly was
missing from the state system, states did not
follow the appropriate process for enrolling
providers, and/or states did not follow the
appropriate process for determining beneficiary
eligibility. However, these improper payments do
not necessarily represent payments to
illegitimate providers or on behalf of ineligible
beneficiaries. Had the missing information been
on the claim and/or had the state complied with
the enrollment or redetermination requirements,
then the claims may have been payable. A smaller
proportion of improper payments are instances
where there was sufficient documentation to
determine that payments should not have been made
or should have been made in different amounts,
which are considered monetary losses to the
Federal Government (e.g., medical necessity,
incorrect coding, and other errors). Medical
Billing Fraud Medical billing fraud can occur in
a variety of ways.  Some of the most common ones
are up-coding, unbundling, and billing for
services that were not provided. Many other
fraudulent schemes exist, however.  When a
provider submits a fraudulent bill for payment,
they may be liable under the False Claims Act,
and whistleblowers play a critical role in
exposing this kind of fraud.
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Differentiating Between Improper Payments and
Medical Billing Fraud

• Three major medical billing frauds are as
  follows
• Up-coding Fraud
• Up-coding is a kind of medical billing fraud that
  occurs when a provider sends a bill to Medicare
  or another payer for a more expensive service
  than the one actually performed. For example, the
  provider might
• exaggerate the time the procedure took to perform
• misstate the equipment involved in the procedure
• lie about the staff involved in performing the
  procedure
• bill for individual therapy when group therapy
  was actually provided
• simply makeup that a procedure happened
• perform (and bill for) procedures that patients
  simply do not need in violation of medical
  necessity rules
• Up-coding also occurs with risk adjustment fraud
  committed under Medicare Part C, when a Medicare
  Advantage patients diagnostic data is
  exaggerated in order to draw additional risk
  adjustment payments from Medicare.

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Differentiating Between Improper Payments and
Medical Billing Fraud
2. Unbundling Fraud Unbundling is a fraudulent
billing scheme accomplished by billing several
different procedure codes for a group of
procedures, even though the group should properly
be billed under a single all-encompassing code.
The sum of reimbursements for each code paid
separately is higher than the reimbursement for
the comprehensive code, causing an overpayment.
For example, a physician might order a panel of
blood tests for a particular patient. The
laboratory receiving the order commits fraud if,
instead of billing for the panel, it attempts to
increase its income by billing separately for
each test conducted. 3. Billing for Services Not
Provided The Government will only pay for
medical services that are actually performed or
for equipment that is actually delivered. It can
be a violation of the False Claims Act to bill
the Government for healthcare services, supplies,
or equipment that were not performed or
delivered. While sometimes bills are submitted
for completely fictional services, medical
billing fraud also happens when, for example, a
diagnostic testing lab submits a bill claiming it
has performed both a two-dimensional CAT scan and
a sophisticated 3D scan and analysis, when, in
fact, only the 2D scan was performed.  They are
billing for a service that was not actually
provided.
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Differentiating Between Improper Payments and
Medical Billing Fraud
Small practices or solo providers might try to
bill for services on their own, without a proper
understanding of payer-specific billing
guidelines and reimbursement policies. This could
lead to improper payments and unintentional
billing fraud. Whether improper payments or
medical billing fraud, it might happen due to the
absence of a skilled medical billing team. Medica
l Billers and Coders (MBC) is a leading medical
billing company. As per your billing
requirements, we can provide state-specific,
medical specialty-specific, and payer-specific
billing and coding services. To know more about
our billing and coding services, call us
at 888-357-3226 or email us at info_at_medicalbille
rsandcoders.com.