14 Different Types of Insurance Billing Fraud and Abuse

14 Different Types of Insurance Billing Fraud and Abuse

Medical billing and insurance fraud has been a constant issue in the healthcare system for decades. With so many wasted funds and increased expenses in the industry, the government has taken action to correct these issues.

It is estimated that around 6 percent of medical bills and insurance claims are falsified in an attempt for the physician and his or her facility to obtain more revenues. Find out about these 14 types of billing fraud and abuse so your organization can take measures to avoid mistakes.

Improper CAC Procedures

Computer assisted coding seems like a flawless way to correct incorrect billing. It is hard to detect this type of fraud as doctor/patient confidentiality requires warrants and court documents to view the content and speak with the patient regarding their care.

Unnecessary Procedures Performed

With advanced technologies in place, there should be no instances of unnecessary procedures being performed. Exploratory surgeries, injections for treatments, and other unneeded procedures take place almost every day.

Misappropriation of Drugs and Illegal Kickbacks

Some physicians take gifts and bribes in exchange for a prescription medication, mostly narcotic pain medication. This is considered as unlawful distribution of drugs and is a crime that is punishable in a court of law.

False Claims and Fake Referrals

It is not uncommon for false claims to be sent into insurance companies. Some billing associates include items requiring approval that are not needed. This stems a lot from fake referrals as the referring physician has a deal with the other physician to receive monetary compensation for referrals.

Misbranding of Drugs

Some drug companies purposely misbrand drugs. This means that they are not including all of the ingredients in a medication. It can lead to harmful side effects or even death.

Mail Fraud

Mail fraud mainly occurs when physicians attempt to team up with physical therapists and specialists. This is merely an attempt to obtain revenues for referrals and partnering fees.

Charging more for Office Visits and Inflating General Costs

Insured patients rarely see a detailed bill. All they see is what the insurance company covered and what they have left to pay. Physicians’ offices have a way of manipulating the insurance companies into paying for items that seem like they don’t belong. This is often done at inflated prices.

Over Billing Hospital Services and Services Not Rendered

Few hospital patients request detailed billing. This is what makes it so easy for hospital systems to double and triple bill for items such as doses of medications administered, procedures that don’t get performed, and tests that never take place. Some services included on these bills make absolutely no sense and the services were not rendered.

Unneeded Services for Kickbacks and Intentional Misdiagnosis

This coincides with receiving kickbacks for referrals, mainly in physical therapy. Some doctors will intentionally misdiagnose or not diagnose a patient until after a battery of tests or imaging cycles are performed. It often leads to a serious or rapidly escalating condition that turns into an emergent situation for the patient.

The U.S. government is doing its best to stop these instances of medical fraud and fraudulent insurance claims. New protocols for billing coders, medical billers, and the healthcare industry in general are in place to make it harder for these professionals to overbill, charge for procedures they did not perform, and refer patients for services they do not necessarily need.


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