Fraudulent Healthcare Billing

Fraudulent billing is a major and costly problem for government-sponsored healthcare programs, such as Medicare and Medicaid. For years, these programs have paid substantial sums of money to unscrupulous participating healthcare providers (e.g., physicians, hospitals, laboratories, testing facilities, medical device manufacturers, and pharmaceutical manufacturers), who have devised numerous ways to fraudulently bill these programs.

As a consequence of the losses incurred by government-sponsored healthcare programs, combating healthcare fraud has been a top priority of the government. Since the 1990s, for example, the U.S. Department of Justice has increased its efforts to reduce the submission of false claims to Medicare and Medicaid. By 2005, whistleblowers took up the mantle; 90% of all healthcare fraud enforcement actions were initiated by whistleblowers through qui tam litigation.

There are various ways that fraudulent billing can occur. Some of the more common schemes are discussed below.

  • Billing for services not rendered or products not delivered/add-on services.
  • Upcoding and unbundling/fragmentation.
  • Duplicate billing.
  • Split billing (billing for procedures over a period of days when all treatment occurred during one visit).
  • Submitting bills to Medicare that are the responsibility of other insurers under the Medicare secondary payor rule.
  • Submitting false certifications and information (e.g., billing for false lab reports, service records, field logs, or samples in order to show better-than-actual performance; certifying that the conditions of a contract were fulfilled when they were not to receive payments or award fees (such as certifying to the government that the contractor complied with environmental, safety, or labor laws when it did not)).
  • Billing for premium equipment but actually providing inferior equipment.
  • Running a lab test whenever the results of some other test fail or fall within unacceptable range, even though the second test was not specifically requested.
  • Inflating bills by using diagnosis billing codes that wrongly suggest a more expensive illness or treatment.
  • Billing for brand-named drugs when generic drugs are actually provided.
  • Billing at doctor’s rates for work that was actually done by a nurse or resident intern.
  • Billing for unlicensed or unapproved drugs.

Through whistleblower lawsuits, private individuals have recovered hundreds of billions of dollars from healthcare providers that have committed healthcare fraud on the government. It is important, therefore, for whistleblowers to continue to expose fraudulent billing practices and unnecessary treatments that cost the government billions of dollars. If you know or suspect that a healthcare provider doing business with a government-sponsored healthcare program is engaged in fraudulent billing practices, please contact Michael S. Bigin or Laurence J. Hasson.