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How Medical Practices Can Avoid Medicare Fraud and Abuse

March 22, 2021

Medicare FraudAccording to data from 2016, CMS spent around $1.1 trillion on coverage for approximately 145 million people across America, yet $95 billion of that constituted improper payments that were connected to fraud or abuse. Unfortunately, it’s estimated by the FB that fraudulent billing constitutes between 3-10 percent of total health spending, a huge driver of waste and inefficiency.

Unfortunately, mistakes that lead to administrative areas like incorrect billing or even upcoding claims can both lead to charges of Medicare fraud and abuse for your medical practice. This can result in legal consequences like being excluded from federal healthcare programs, and could even lead to the loss of professional license in some cases. Some of the laws governing Medicare fraud and abuse include the Social Security Act, United States Criminal Code, Physician Self-Referral Law, False Claims Act, and the Anti-Kickback Statute.

With the amount of fraud that does occur, Medicare and Medicaid officials scrutinize claim submissions to detect potential problems. It’s essential to understand crucial healthcare fraud laws, put a compliance program in place, and work on improving business operations and medical billing practices to avoid Medicare abuse and fraud.

What Exactly is Medicare Fraud?

According to CMS, examples of Medicare Fraud may include:

  • Billing for services that were not furnished, supplies that weren’t provided, or both, knowingly and falsifying records to show these items were delivered
  • Paying for referrals of beneficiaries to Federal health care programs
  • Billing for services at levels of complexity that were higher than services provided or documented knowingly
  • Billing Medicare for any appointments that a patient didn’t keep
  • Ordering items or services that weren’t medically necessary for patients knowingly

Anything that includes submitted false claims, knowingly misrepresenting facts to get Federal health care payments, soliciting, paying, offering, or receiving kickbacks of any kind to get referrals for services or items that are reimbursed by Federal programs, or making prohibited referrals can be considered health care fraud.  

Medicare abuse differs a bit from fraud and is any type of practice that may either directly or indirectly cause unnecessary costs to Medicare. This could include:

  • Charging excessive rates for supplies or services
  • Misusing codes on claims, such as unbundling codes or upcoding
  • Billing for medical services that are unnecessary

Tips for Creating Compliance Programs

One of the key ways that you can prevent Medicare abuse and fraud is to create your own compliance program. These programs should establish a culture within your practice that promotes preventing, detecting, and resolving and types of conduct that don’t follow Federal laws. Some helpful tips for creating a compliance program for your practice include:

  • Be sure that you offer continuous training and education for members of your staff
  • Develop and distribute written standards of conduct and policies promoting your practice’s commitment to compliance, also addressing potential areas of fraud like financial relationships with providers or claims management.
  • Establishing a system that responds to any Medicare abuse and fraud accusations
  • Have a system in place that will keep track of compliance adherence to help reduce problems
  • Develop a process through which you can receive any fraud or abuse complaints and reports

Improving Medical Billing and Coding Practices

Although a quality compliance program is critical for preventing Medicare abuse and fraud, it’s also essential to take steps to improve your medical billing and coding processes. One of the key places to start is with clinical documentation, which is the basis upon which Medicare reimburses practices for services rendered.

In many cases, problems with clinical documentation lead the way for billing and coding problems, such as:

  • Billing for procedures that are considered medically unnecessary
  • Billing for services that weren’t rendered
  • Billing for tests or procedures that are of poor quality and basically worthless
  • Billing for separate services that were previously included in global fees
  • Billing for services that were performed by an unqualified or improperly supervised individual

According to Revcycle Intelligence, CMS has specifically advised practices to avoid upcoding, which some practices may do in order to boost claims reimbursement and increase revenue. Benchmarking can also help, and providers should evaluate billing data and compare it to similar practices nationally, regionally, and locally.

Proper training for billing and coding staff also proves critical when working to prevent Medicare abuse and fraud. Failure to stay up-to-date on the latest billing and coding guidelines can prove costly and may result in audits and even charges against your practice. For many smaller practices, outsourcing to a billing and coding company that uses skilled, highly-trained professionals offers an excellent way to prevent errors that could lead to problems.

Are you ready to improve billing practices, ensuring you’re compliant with government requirements to avoid fraud? Contact our medical billing and coding professionals at M-Scribe today for more information on how we can help meet your practice’s needs.


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