Definition of Medical Billing Fraud

Medical billing fraud is a big problem in the United States. It costs the American health care industry billions of dollars each year. The trickle-down effect is the insurer passing down the higher costs to the insured through elevated premiums and deductibles. This type of fraud, like many others, can be difficult to prove. However the diligence of the party who is presented with the erroneous bill can uncover the discrepancy before it is too late.

The Facts

• Committing fraud means an intentional deception or misrepresentation made by a person with the knowledge that the deception could result in some unauthorized benefit to himself or some other person. A study suggests that 9 out of 10 hospital and provider bills contain errors which alter the invoice amount. Several parties including patients, providers, insurance companies and pharmacists commit some form of medical billing fraud to the tune of $51 billion annually.

Causes

• There are many ways that medical billing fraud can be committed. For patients, these include identity theft, misrepresentation of eligibility status and changing medical records and referrals. For providers, common offenses include double billing and up coding for services, running script mills and falsifying information in order to justify coverage. For insurance companies, examples can be not paying for claims submitted by patients and providers, rigging the bids or committing collusion between providers and themselves and paying excessive salaries and incentives to employees. Pharmacies are guilty if they bill for prescriptions never picked up, billing for brand name drugs but substituting with generic versions and not providing the correct amount of drugs that were paid for.

Significance

• With three percent of 1.7 trillion dollars annually being paid through fraud, it is important to know how much medical billing fraud affects our health care industry. Overpaying, underpaying and not paying claims have helped increased heath care costs around the country. The higher costs have created over 47 million uninsured Americans who can't afford health insurance in part because of improper billing practices. If you are a victim, know someone who is or are aware of fraud being committed, it is important to report the actions to the proper authorities.

Considerations

• Medical billing fraud is usually done on both ends. The insured submit claims to their insurance company for services they didn't receive or were charged for. They attempt to get reimbursed for services they never paid for. Hospitals and doctors commit the same acts when issuing a bill to their patients and to the insurance company for services they didn't provide. Some even provide services that weren't necessary to jack up their bill. To be fair some cases of fraud aren't intentional. Human error such as omissions, typos, data entry mistakes and incompetent employees can also aid in the creation of flawed invoices.

Warning

• Anyone can be a victim of medical billing fraud if they received medical care. It is prudent that they check their bill to see if all charges are accurate in terms of costs and services. Asking questions may be necessary if they are unsure of the charges and want some clarification. Not examining a bill may lead to paying for services and/or products never received.