Avoiding False Claim Billing for your Practice

Understanding False Claims Act

As a healthcare practice, you can typically submit claims to Medicare or Medicaid. Your claims are bills for goods you provide and services you conduct for patients. These federal health insurance programs cover the costs associated with your services. The False Claim Act is a federal law that makes it a crime for any person or organization to knowingly make a false record or file a false claim regarding any federal health care program, which includes any plan or program that provides health benefits, whether directly, through insurance or otherwise, which is funded directly, in whole or in part, by the United States Government or any state healthcare system. In other words, healthcare practices must not bill the government for things they did not do. Examples of false claims include billing for services not provided, billing for the same service more than once, or making false statements to obtain payment for services.

Penalties under the False Claims Act

Violations under the federal False Claims Act can result in significant fines and penalties. Financial penalties to the person or organization include recovery of three times the amount of the false claim(s), plus an additional penalty of $5,500.00 to $11,000.00 per claim. Violation of the MMFCA constitutes a felony punishable by imprisonment, a fine of $50,000 or less, or both, for each violation. A person who receives a benefit, by reason of fraud; makes a fraudulent statement; or knowingly conceals a material fact is liable to the state for a civil penalty equal to the full amount received plus triple damages.

Examples of False Claims

Healthcare fraud can involve individuals or groups of healthcare workers misrepresenting their services and end up overcharging the government. The United States Department of Justice listed a few instances of healthcare fraud.

  • Billing for services not rendered or goods not provided: You cannot submit claims for medical services that you did not perform, treatments you did not offer, diagnostic tests you did not conduct, medical devices you did not use, or pharmaceuticals that you did not render. Regardless of the extra cost that you may earn from the false claims, you could get fines of up to three times the government’s loss.
  • Falsifying certificates of medical necessity and billing for services not medically necessary: It is illegal to charge federal insurance companies for unnecessary medical services. Should the government discover that you billed them for performing a medical exam or prescribing medicine that the patient did not need, you could face charges for making a false claim.
  • Billing separately for services that should be included in single service fees: Be sure to combine bills for services that you need to combine. Some physicians may attempt to defraud the government by separating the bills for multiple services under one package.
  • Falsifying plans of treatment or medical records to justify payments: This scheme may fall under the criminal component of the FCA. You could face severe charges for creating fake supporting documents in an attempt to validate your false claims.
  • Misrepresenting diagnoses or procedures to maximize payments: Some physicians may misrepresent the diagnoses of their patients, meaning they would exaggerate their patient’s condition to maximize the return they receive from the federal health insurance provider. This tactic can be related to falsifying medical certificates.
  • Misrepresenting charges or entitlements to payments in cost reports: This fraudulent method may be related to billing for medical services and goods that you did not render or provide. In this case, a fraudulent physician would falsify their entitlements to reimbursements.
  • Soliciting “kickbacks” for the provision of various services or goods: The law prohibits physicians from receiving solicitations or “kickbacks” for referring their patients to federal health programs. Kickbacks include money and anything of value. For example, as a physician, you refer your patient to a facility that bills their services to Medicaid. That facility pays you for referring a patient to their services. The law prohibits such behavior, meaning you would have committed healthcare fraud.

Small practices or solo providers who are handling medical billing operations all by themselves might make a mistake and submit a false claim/s. Every single claim should be supported with appropriate documentation and medical necessity (wherever applicable) along with accurate use of procedure codes and modifiers (wherever applicable). Providers might use few procedure codes for all their patients, while submitting the claim, without supporting documents and/or inappropriate use of modifiers to receive more insurance reimbursements. 

Medical Billers and Coders (MBC) is a leading medical billing company providing complete revenue cycle services. We can assist you in submitting claims with correct procedure codes and modifiers to receive accurate insurance reimbursements. Our billing team is always on top of constantly changing billing guidelines and payer reimbursement policies to submit correct claims. To know more about our medical specialty-specific billing services, contact us at info@medicalbillersandcoders.com/ 888-357-3226

Reference: Complete Guide to the False Claims Act for Healthcare Practices

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