7 Deceptive Medical Billing Practices to Avoid

Integrity is vital in healthcare, as it allows for safer care and better outcomes. Therefore, it’s imperative to establish trust and transparency among all stakeholders – from clinicians and patients, practitioners and colleagues, healthcare organizations, and between organizations and the general public.

However, because of the complex administrative processes involved in healthcare, it can be challenging to maintain transparency and build trust. Often, trust is broken through deceptive practices in areas like medical billing, where errors occur. It might be human error or unintentional, but it can not only ruin a patient’s trust in your organization but also cost your organization money or result in a lawsuit.

Below are seven deceptive medical billing practices you should avoid.

1. Upcoding

Upcoding happens when a healthcare provider reports and bills insurers a higher evaluation-and-management (E&M) code than what they performed for their patients. For example, a patient just underwent a follow-up consultation, but the provider reports as if having conducted a serious and more complex and expensive diagnosis or procedure.

Sometimes, specialists report the highest E&M codes, considering they see patients with complex and specific conditions. Healthcare providers should accurately report the level of E&M code based on the patient’s condition and not just based on their assumption or specialty. Every procedure, consultation, diagnosis, and time spent with patients should be accurately reported for transparent and fair claims reporting.

2. Undercoding

Undercoding involves reporting only some of the codes or leaving out E&M codes when billing. This means the billing only reflects some of the services and procedures performed on the patient. This negatively affects revenue and skews the healthcare provider’s claims data.

3. Unbundling

Unbundling happens when a provider bills different Current Procedural Terminology (CPT®) codes for a set of services or procedures that could have been encompassed in a single code.

This can happen because of either misunderstanding or an intentional effort to increase the amount billed to insurance providers. When a single code is available that covers payment for the component parts of a procedure, it is important to use that code.

4. Misrepresentation

Misrepresentation in billing practice encompasses inaccurate representation of information and may come in many forms. This includes the locations of service, as where procedures are performed can help justify additional costs incurred.

For example, a procedure conducted at a hospital might require different tools and medications compared to that performed at home or outdoors. Other information that can be misrepresented in billing includes dates and the provider of service

5. Phantom Charges

Phantom charges are procedures and treatments billed to insurance providers which never occurred or were rendered. In 2010, there was $251 million worth of reported false claims for procedures that are billed but are medically unnecessary or never provided to patients.

This fraudulent practice is widespread in many institutions primarily due to corruption, but it does have a negative effect on the economy and the patients who actually need to receive care. This can cause a spike in insurance prices for patients, making it more difficult for them to access healthcare.

6. Double Billing

Double billing happens when the same bill is submitted multiple times even when a procedure or service was performed only once. This can also happen when a provider bills both government and private insurance providers, allowing them to get double payments for a service rendered to one patient. This can be due to human or software error, or can also be due to the intention to bill higher payments from insurance providers.

7. Medical Equipment Fraud

The government subsidizes medical devices and durable medical equipment and supplies (DME), which can also be subject to fraudulent claims. Medical devices span everything, from a scalpel to technological tools used to diagnose and treat patients. Meanwhile, through Medicare and Medicaid, the US government pays for a variety of medical devices prescribed by doctors to patients.

Medical equipment fraud and abuse may come as illegal payment arrangements with suppliers, buying off-label or unapproved products, purchasing defective devices, or prescribing unnecessary DMEs. Hiring unlicensed technicians and putting up a facility without legal licenses may also be considered fraud.

Consequences of Deceptive Medical Billing

Deceptive medical billing makes healthcare systems inefficient and unfair to many patients, practitioners, and institutions. Healthcare fraud is a serious offense and may lead to legal charges. In addition, it can permanently tarnish a healthcare provider’s reputation. In turn, this may lead to losing your patients’ trust.

Furthermore, deceptive billing will only let very few people benefit and bilk on insurance providers and the government. While in the long run, it can cause the healthcare system to collapse, as healthcare organizations and patients suffer from costs.

How To Avoid Deceptive Medical Billing Practices

Here are ways how you can avoid deceptive medical billing practices as a healthcare provider:

Seek Out AAPC Certification

AAPC provides medical coding certifications recognized in the healthcare industry, including by employers, physician societies, and government organizations. An AAPC medical coding certification can help a healthcare institution and its billing specialist to identify and adopt best practices and compliant medical coding and billing.

Hire a Compliance Professional

It might appear as an additional cost to an organization, but hiring a compliance professional specializing in coding and fraud to review billing documents can help you save resources. Having bills reviewed before sending them to insurance providers or patients can help you identify errors and solve them before they are filed.

Manage Your Staff

It’s important to hire healthcare and billing staff carefully. Make sure to conduct background checks regularly to ensure that everyone’s intentions are aligned with that of the healthcare organization. This can help you filter out corrupt people who might conduct healthcare fraud or abuse.

In addition, train your staff to also be responsible and cautious when delivering services and even when handling billing processes and documents. Moreover, it’s important that healthcare staff is encouraged to come forward if they suspect a colleague of deceptive billing practices. Provide them with an easy and safe way to report any suspicious conduct that may be fraudulent.

Monitor Healthcare Professionals

Doctors and other healthcare practitioners greatly contribute to society, but that does not mean they have the right to commit fraud or abuse. It is important to make sure that whether they are a physician or a specialist, they must report accurate claims and billing information.

Be on the lookout for suspicious charges or high numbers of expensive services from the same healthcare professional. Collect and cross-check data and documentation as needed to make sure that everyone is working in compliance with the law.

Foster Trust and Transparency in Healthcare

Patients trust healthcare providers literally with their lives. Therefore, it’s important to return this trust through honest and transparent services, be it the clinical procedures or the administrative processes, especially through billing.

Patients and insurance providers should only be charged with delivered and received services to create a fair, healthy, and continuous economic cycle in the healthcare sector and keep it running for everyone’s benefit.

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