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Avoiding Fraudulent Billing – New Medical Practices Should Know

New Medical Practices

The subjects covered in this article will assist you as new medical practice in avoiding fraudulent billing.

During your training as a healthcare professional, it’s likely that you are not thinking about who pays for the treatment of your patients. Once you begin working as a practitioner, it’s critical to comprehend who the payers are. Since the American healthcare system mainly depends on third-party payers, it’s expected that your patients don’t pay the majority of their medical expenditures.

Third-party payers are entities that pay for medical expenses not covered by the individual or family health insurance policy. The federal government is the largest payer in the United States, but other third-party payers are also used in the U.S healthcare system.

Many states have also passed comparable legislation covering individuals who pay privately and those receiving treatment through state-funded programs. As a result, you should be aware that the issues covered here may be relevant to treating all insured patients and avoiding fraudulent billing.

Billing Process

The first step in avoiding fraudulent billing is to ensure that all of your billing is done correctly. This includes billing and coding of services accurately, as well as following all applicable insurance guidelines. Additionally, it is essential to have a robust system in place to track and verify billing information. The more you can do while avoiding fraudulent billing, the less likely you are going to experience it.

Duplicitous billing can result in your insurer refusing to pay your claims, which could cause financial problems. Additionally, if your insurer determines that you or your provider have committed fraud, you could face criminal charges. In general, the government will only settle claims based on the health information you provided in the claim’s papers because the government places much initial trust in doctors. The government has extensive tools for auditing claims and looking into service providers when there is a suspicion of fraud.

However, unusual billing reports from others, such as your personnel, competition, and patients, may create suspicions of fraud and abuse. Take Medicare or Medicaid billing as an example. When you file a claim with the federal government for services rendered to a Medicare or Medicaid recipient, you are proving that you have earned the requested reimbursement and met the billing standards.

If you don’t submit the required documentation, the government will deny your claim, which can be costly. There are several ways to avoiding fraudulent billing and reduce the risk of claims denial:

  1. Use the proper claim forms. Medicare and Medicaid require specific forms to be used when submitting claims.
  2. Make sure you have the correct provider identification number (PIN). This number is listed on the front of your provider’s ID card.
  3. Review your claims carefully to make sure they are complete and accurate.
  4. Maintain a record of all payments and expenditures.

Lack Of Medical Coding

Upcoding gives a patient’s diagnosis for an illness that is more severe than what they have. Since insurers give more money for serious diseases, this approach boosts a practitioner’s income. Utilizing Evaluation and Management (E&M) procedure codes, Medicare covers many physician services.

In general, follow-up visits for existing patients take more time than for new patients; hence E&M codes for new patients are reimbursed at a higher rate than E&M codes for established patients. This will help practices in avoiding fraudulent billing and ensure that their services are appropriate and essential.

Upcoding is a prevalent false claim, which refers to utilizing billing codes suggesting a more severe condition than existed or more expensive care than was administered.

Some examples of false assertions are:

  1. An excessive amount of time spent on the patient.
  2. A medical procedure was performed that was not medically necessary.
  3. An unapproved procedure performed by a non-physician.
  4. A procedure was billed as an inpatient admission when it was an outpatient visit.
  5. A procedure billed as an emergency when it was a routine office visit.
  6. A medication was prescribed when it was a nutritional supplement.
  7. A procedure billed is of such poor quality that they are essentially useless and separately charges for services that are already covered by a flat cost, such as the day after surgery for an assessment and management service.

The use of technology has also improved the quality and speed of medical coding. Technology such as computerized records, EMRs/EHRs (Electronic Medical Records or Electronic Health Records), and PACS (Picture Archiving and Communication System) has made coding easier.

Computerized records make it easy to search through a patient’s medical history and determine the best way to bill a claim. The ability to store images, such as x-rays, CAT scans, MRIs, and ultrasound exams, in a central database makes it easier for physicians to access this information when needed.

Inaccurate And Falsified Medical Records

Inaccurate and falsified medical records can lead to incorrect diagnoses and treatments, which can harm a patient’s health. Inaccurate and falsified medical records can also lead to lost wages, other financial losses, and emotional distress. However, one of the most challenging types of medical fraud to identify is fabricated records because many incidents are spontaneous. Numerous claims can be presented without medical records, which is one of the leading causes of this issue.

One way to minimize medical record errors is to establish a medical records management system. These systems track and manage all medical records for a given patient. They can be used in avoiding fraudulent billing by automatically identifying potential errors in the patient’s medical history, thereby reducing the risk of making an incorrect diagnosis.

You should check – Building Your Medical Practice

Over The Top Services To The Patient

Many different types of services are available to patients, each with its benefits and drawbacks. Therefore, another prevalent medical fraud involves billing the insurer for additional services beyond what the patient needs. This behavior encompasses offering needless services and billing for ones that weren’t even provided.

Since fraud happens purposely charging for excessive amounts of services which can be challenging to identify and error happens unknowingly due to destructive billing processes. Although it isn’t always the case, healthcare facilities should have procedures that efficiently capture the fee for each service. If they do not, it may lead to unnecessary charges. To avoid such incidents, healthcare facilities should establish a process that includes the following steps:

  1. Conduct a thorough review of all accounts to detect fraudulent activity.
  2. Develop a system to monitor accounts for any suspicious activity.
  3. Establish a team of employees responsible for monitoring accounts.
  4. Regularly review the accounts of all employees to determine if there is any evidence of wrongdoing.
  5. Use an established billing system to manage accounts.

Final Thoughts On Avoiding Fraudulent Billing

It is essential to understand the risks associated with fraudulent billing. By understanding the risks and knowing the laws governing medical billing, it is possible to avoid being taken advantage of by unscrupulous medical billing practices.

Fraudulent billing is a symptom of an underlying problem within the medical community. As a new medical practice, your patients are only one step away from being hit with a huge bill they have no idea how to pay. To avoid this, healthcare providers need to know how to prevent the fraud in billing.


Q1. What Are Improper Billing Practices Considered While Avoiding Fraudulent Billing?

Ans: When physicians, hospitals, or other providers charge patients with both Medicaid and Medicare for co-pays, co-insurance, or deductibles, this is considered improper billing.

Q2. What Is Unethical Billing?

Ans: This indicates that a patient was not billed for faulty services but rather for services that were never performed.

Q3. What Is The Golden Rule In Coding And Billing?

Ans: “Do not code or charge for anything if it is not recorded in the medical record.” Providers utilize clinical documentation to defend payments to payers when there is a discrepancy between a claim and a reimbursement.

Q4. How Do You Prevent False Medical Claims?

Ans: You can prevent false medical claims by doing the following:

  1. Verify all member identification cards prior to giving service.
  2. Ensure accuracy while filing service invoices or claims.
  3. Submit the necessary Referral and Treatment paperwork.
  4. Avoid needless prescribed medication or medical care.

Q5. What Happens If You Falsely Claim?

Ans: Included in the criminal consequences for filing fraudulent claims are imprisonment and fines.

Also, Read – The Business of Better Billing: 8 Benefits of Medical Billing Services

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