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Towards honest Medicare billing practices

April 26, 2012

In an industry characterized by the highest level of professional integrity and honesty, it is strange yet true that health insurance related fraud and abuse have reached alarming heights. While the incidence of fraud and abuse are equally spread across the health insurance continuum, it’s more intense in Medicare. In fact, a reliable survey (by the American Society of Business & Behavioral Sciences) puts the cost of such Medicare fraud and abuse at a staggering $700 billion annually, which is close to one third of the total healthcare spend. What is even more frightening is that that 80 percent of healthcare fraud is committed by hospitals, clinics and medical providers themselves! While the Federal Government has set up a recovery mechanism, the percentage of recovery against the eroded Medicare expenditure has been rather dismal – roughly about 5% of the expenditure lost to Medicare fraud and abuse is recovered annually.

While the unscrupulous hands have stood to gain (rather dishonesty), it is the Medicare that has to bear the brunt – the Sustainable Growth Rate (SGR) has grown so monstrous that the Federal Government is on the brink of introducing cuts to Medicare reimbursements. To compound the matter even further, the mandated transition from ICD-9 to ICD 10 could make Medicare even more prone to fraud and abuse. As diagnostic codes will increase from 14,000 to 69,000 and procedure codes will increase from 3,800 to 72,000, there is an undercurrent that more complex the coding system, the greater the opportunity for fraud & abuse.

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Although the Federal Government has a stringent policy in place for penalizing unscrupulous intentions, yet the duality of the menace – wherein beneficiaries and providers contribute equally to fraud and abuse – and the unholy nexus between them – wherein they collude for unholy gains – have rather been tougher challenges.

Duality of fraud and abuse of health insurance schemes
Fraud by healthcare providers Fraud by health insurance beneficiaries
  • Billing for services that were not provided
  • Using a member ID card that does not belong to that person
  • Duplicate submission of a claim for the same service
  • Adding someone to a policy that is not eligible for coverage
  • Misrepresenting the service provided
  • Failing to remove someone from a policy when that person is no longer eligible
  • Upcoding – charging for a more complex or expensive service than was actually provided
  • Doctor Shopping – visiting several doctors to obtain multiple prescriptions
  • Billing for a covered service when the service actually provided was not covered

Left with no alternative, Medicare has introduced radical measures to detect, investigate, prevent, prosecute, and recover the loss from fraudulent and abusive actions committed by providers, members, groups, brokers, and others. Although RAC audits have been able to recover a substantial amount of fraudulently claimed reimbursements, still, a considerable cases find ways to sneak under their nose; the high cost of appointing Recovery Audit Contractors (RACs) – nearly ¼ of the total reimbursement to be audited for fraudulent realization is not helping the cause either. Therefore, suspension and cancellation of practice license and Medicare benefits, legal prosecution have become more viable options.

As Medicare fraud and abuse can land beneficiaries and providers in the legal binds, it is high time that they scrupulously avoid such unholy habits or seek professional advice in case their cases are unintentional. This is where medical billers and coders’ competence will come to fore in aiding them to practice honest medical billing practices. Medicalbillersandcoders.com – by virtue of a long-standing credibility as the leading consortium of medical billing for Medicare-related reimbursements and Revenue Cycle Management (RCM) services – may well be your preferential partner for being immune to legal implications surrounding Medicare fraud and abuse.

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