The False Claims Act and Fraudulent Medical Billing


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The False Claims Act has helped curb the practice of fraudulent medical billing and dishonest contractors who were receiving benefits that they were not entitled to. There are a number of fraudulent types of medical billing that can ultimately result in prosecution under the False Claims Act.

Total Neglect or No Services Provided

The most egregious and blatant violation of the False Claims Act is when a healthcare provider bills for services that were not furnished to the listed patient.


Worthless Services

Another type of fraudulent billing occurs when a healthcare provider has no good faith basis to order a particular type of service. If the healthcare provider ordered a service that had no medical value, this can be an egregious billing.

Inadequate Services

Another type of fraudulent billing involves inadequate care. This can happen when a healthcare provider denies tests or services or submitting a claim for a procedure without completing one of the necessary components.

Diminished Standard of Care

Each type of medical facility is required to provide a specific standard of care, including independent healthcare providers, nursing homes, hospitals and other medical facilities. This standard of care is the reasonable care that a person expects to receive. Additionally, recipients of Medicare, Medicaid and Social Security are required to adhere to the quality of care standard that applies. If the provider does not meet the requisite standard, it can be excluded from the program and be subject to monetary damages. If a patient is subjected to an unreasonable degree of risk based on the providerís failure to adhere to the proper standard of care or to take proper preventative measures, these results may arise.

Unnecessary Services

A healthcare provider may order unnecessary tests or order unnecessary medical services in an attempt to increase its profit margin if it is reimbursed for each unnecessary test or service.

Misrepresentation of Credentials

The False Claims Act can also recognize liability when the healthcare provider who provides medical services misrepresents his or her credentials. This can result when a person who is precluded from reimbursement performs certain medical services although billing it under a different providerís name and credentials. Alternatively, the healthcare provider may provide an incorrect provider identification number or that a teaching physician was present for a procedure when he or she was not.

Improper Coding

Medicare reimbursement requires a healthcare provider to furnish the government with proper documentation to support the claim. Documentation usually includes the correct coding of certain services so that the healthcare provider communicates with the government about the services, procedures or goods that it uses and for which reimbursement is pursued and at the proper rate for these goods or services.

Medicare and Medicaid also uses certain codes to classify certain diagnoses for patients who receive these benefits. Special codes are also used to determine the amount of reimbursement that a healthcare provider receives. The accuracy of coding is a central area of concern for healthcare provider offices, clinics and hospitals. Inaccurate coding can result in financial and sometimes criminal consequences. Improper coding has been the foundation for many judgments against various healthcare corporations, physician groups and individual physicians.

Bundling and Unbundling Procedures

Sometimes healthcare providers will link a number of different medical services to include it as one inclusive procedure. This makes the bundled services listed as one item instead of multiple procedures that are listed separately. There are specific guidelines that healthcare providers are required to follow to determine which medical goods and services can be bundled in this fashion. For example, if a healthcare provider submits a patient for laboratory testing in which the patientís blood is drawn and tests are performed to diagnose the patient, the guideline may suggest that all of the tests be included as one service rather than trying to segregate each test into an individual service that is submitted for reimbursement.

A possible example of a false claim based on this type of issue is when a healthcare provider initially bundles particular services to receive the reimbursement but then later submits a claim in which the healthcare provider unbundles the procedures in order to receive a second reimbursement for the same set of services that were rendered and already reimbursed. This ultimately can result in a double reimbursement for the healthcare provider. Providers may have an inherent incentive to try to seek reimbursement for unbundled goods and services due to the possible financial gain that they can receive. However, the consequences can be dire.

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Disclaimer: While every effort has been made to ensure the accuracy of this publication, it is not intended to provide legal advice as individual situations will differ and should be discussed with an expert and/or lawyer.

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