Medical billing is complicated. It operates at the intersection of medicine, federal regulation and payer-specific policies.
And few words can cause more anxiety for healthcare providers than “billing fraud.” Many Medicare fraud investigations begin with allegations of improper coding, so when investigators start using terms such as “upcoding” and “unbundling”, understanding is critical.
When does a billing issue become criminal?
Billing disputes and audits are common in healthcare. Not every mistake, disagreement or overpayment is pursued by investigators. But what often begins as an audit can escalate if they believe there was deliberate misconduct.
Upcoding is one of the fraudulent practices investigators often find. It occurs when a provider bills Medicare for a more expensive service than the one actually performed, such as reporting a more complex procedure than was provided, or using a diagnosis code that increases reimbursement without clinical documentation to justify it.
Unbundling is another practice that can lead to criminal charges. Providers bill separately for services that Medicare considers part of a single, bundled procedure. Medicare’s coding system sometimes combines related services into one comprehensive payment. By breaking down the service into separate line items, providers can increase their reimbursement.
In addition to upcoding and unbundling, federal investigators frequently pursue cases involving:
- Billing for services not provided
- Billing for services, tests or procedures considered not medically necessary according to Medicare guidelines
- Submitting multiple claims for the same service
- Kickback-related billing
To pursue Medicare fraud charges, prosecutors must prove that the provider knowingly and willingly engaged in fraudulent billing practices. They consider factors such as:
- Was there an intent to deceive?
- Was there documentation supporting clinical judgment?
- Were policies and procedures in place that followed Medicare guidelines?
- Was the billing done in-house or by a third-party?
A conviction of Medicare fraud can carry severe penalties, including fines, restitution, and imprisonment. Therefore, early intervention is crucial if you learn you are under investigation. You need a legal team that can evaluate the situation to determine whether the allegations reflect intentional conduct or disputes. They can also work with investigators on your behalf to protect your rights and prevent the escalation from civil to criminal proceedings.