Let’s face it, many practices are having a hard time staying profitable and may engage in some “creative billings” to increase what they are paid by various carriers. For some reason, practices seem to think that Medicare/ Medicaid/ and Tricare are their only real concerns when it comes to misrepresenting services for financial gain.

SadTypically their first concern arises when they receive a letter from an investigations unit requesting several patient files for specific dates of service that the carrier bases on their provider participation agreement authorizing the plan(s) to perform reviews, audits and statistically valid sampling techniques for peer review program activities, medical necessity reviews, data validation reviews, billing and claims payment audits, coding or quality review audits; all of which routinely hold all physicians in the practice jointly and severally liable for misreporting by any and all providers in the practice.

Healthcare fraud is a crime under most criminal codes and consists of intentional deceit within the healthcare system for the purpose of illicit gains. Healthcare abuse is similar activity or behavior where knowing intent to obtain an unlawful gain cannot be established.
The primary difference between fraud and abuse is a person’s intent. That is, did they know they were committing a crime? In either case, the key component is that the perpetrator knew or should have known that the act was improper or inconsistent with sound practices.

It’s important to distinguish health care fraud from mere mistakes, omissions, or improper payments. To commit fraud, a person must knowingly engage in a plan, scheme, or activity to provide falsehoods or misrepresentations with the intent to achieve some financial gain.

The proof of the allegations is the existence of the claims regardless of the payment or denial. The scheme does not need to be successful to be considered fraudulent.

Most practices referred by the carrier for criminal actions are due to intentional misrepresentation of the procedure performed and willful misconduct by the providers, managers and billing people to mis-code the actual service(s) and falsify the medical records to support the misrepresented service codes. The “collaboration” of the parties to the scheme is usually prima facie evidence of intent and the testimony of one of the more innocent collaborators who rolls over on the boss, is all it takes to prove intentional fraud.

Stealth Coding.
The “basic instructions” on code selection contained in the CPT®* manual prohibits “stealth” coding.
“Select the name of the procedure or service that accurately identifies the service performed. Do not select a CPT code that merely approximates the service provided. If no such specific code exists, then report the service using the appropriate unlisted procedure or service code. ………When necessary, any modifying or extenuating circumstances are added. Any service or procedure should be adequately documented in the medical record.”

Conservative estimates of the amount of healthcare expenditures lost to fraud is three percent of total services paid, which equates to over $70 billion annually. Frequently seen examples are;

• Billing for more expensive services or procedures than were actually provided or performed, commonly known as “upcoding”-i.e., falsely billing for a higher-priced treatment than was actually provided. This is often combined with an accompanying “inflation” of the patient’s diagnosis code to a more serious condition consistent with the false procedure code.
• Performing medically unnecessary services solely for the purpose of generating insurance payments-seen very often in nerve-conduction and other diagnostic-testing schemes.
• Misrepresenting non-covered treatments as medically necessary covered treatments for purposes of obtaining insurance payments- This is often seen in multidisciplinary settings where a non-covered service such as spinal manipulation or extremity adjustments by a Chiropractor are represented as a covered physical therapy procedures under order of a medical provider.
• Falsifying a patient’s diagnosis to justify tests, surgeries or other procedures that aren’t medically necessary.
The majority of health care fraud is committed by a very small minority of dishonest health care providers.

Sadly, the actions of these deceitful few ultimately serve to sully the reputation of perhaps the most trusted and respected members of our society-our physicians. Unfortunately these fraud-doers take advantage of the confidence that has been entrusted to them in order to commit ongoing fraud on a very broad scale and their ability to spread false billings among many insurers simultaneously including public programs such as Medicare and Medicaid, where they can maximize fraud proceeds while lessening their chances of being detected by any a single insurer.

Federal Criminal False Claims Statutes (18 U.S.C. §§ 287,1001) Section 1001 applies to anyone whose action(s) related to any claim(s) for government payment consist(s) of any of the following:
• Falsifying, concealing, or covering up by any trick, scheme or device a material fact related to any claim(s) for government payment;
• Making any materially false, fictitious or fraudulent statement or representation; • Making or using any false writing or document knowing it contains any materially false, fictitious or fraudulent statement or entry.
Section 287 states that whoever makes or presents to the government a claim knowing that it is false, fictitious or fraudulent shall be imprisoned and subject to fines.
We understand from attorneys that the government is required to establish all of the following in regard to the action(s) of a false claim(s) case defendant. He/she:
• Made or presented a false, fictitious or fraudulent claim to a department of the United States;
• Knew the claim was false, fictitious or fraudulent; and
• Did so with the specific intent to violate the law or with awareness that what s/he was doing was wrong.

EMPLOYEES BEWARE: Bosses are not doing their employees any favors when the intimidate them to “do as they are told”. Filing false and miscoded claims can seem like a minor crime, but a conviction for health care fraud, especially when the defendant is a professional who depends on a license to practice, can irreparably change the course of that professional’s life. “My boss made me do it” is normally NOT going to get you absolve you of your participation in perpetrating the crime or conspiracy to cover it up.

As carriers improve investigative techniques through their National Health Care Anti-Fraud Association and refer more cases for criminal action in addition to recovering their money, we need to offer the following advice to our members;
The moment you are approached by investigators about a potential fraud case, you need to contact a criminal defense attorney. You can unknowingly incriminate yourself anytime you speak to an investigator if you don’t have legal advice. Local criminal defense attorneys are the only people capable of providing you with legal advice in light of their knowledge of the law, as well as their experience with local prosecutors, courts, and criminal investigations.

If you’re being investigated for breaking a federal law, your case will be handled in the federal court system. Be sure that the lawyer you choose has experience handling federal cases.

Naturally the best defense is to do it right in the first place.
If you are unsure of a particular billing scenario or you get a “I get paid doing this” from a “friend”, Contact us! Your Academy is here to help you.

*CPT is a registered trademark of the American Medical Association- gratefully used with their permission.