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Why is Accurate Coding and Billing for Health Care Providers Important?

Posted by Tracy Green | Jun 09, 2018

Health care billing is essentially a good faith system. Payers trust health care providers to provide necessary, cost-effective, and quality care or products and to bill it accurately. A health care provider exerts significant influence over what services patients receive, controls the documentation describing what services they actually received, and documentation serves as the basis for bills sent to insurers for services provided.
The Government's or Third Party Insurance Carrier's payment of claims is generally based solely on representations in the claims documents. Because the Government and Insurance Companies invest so much trust in health care providers on the front end, Congress and California legislatures provided powerful criminal, civil,and administrative enforcement tools for instances when providers abuse that trust. The Government has broad capabilities to audit claims and investigate providers when it has a reason to suspect fraud. Suspicion of fraud and abuse may be raised by irregular billing patterns or reports from others, including your staff, competitors, and patients.
When you submit a claim for services performed for a Medicare or Medicaid beneficiary or private insurance beneficiary, you are filing a bill with the Federal or State Government or private insurance company and certifying that you have earned the payment requested and complied with the billing requirements. If you knew or should have known that the submitted claim was false, then the attempt to collect unearned money constitutes a violation of the federal or state false claims act or constitute the basis for civil liability or in some cases, criminal.
A common type of false claim is “upcoding,” which refers to using billing codes that reflect a more severe illness than actually existed or a more expensive treatment than was provided. Additional examples of improper claims include:
  • billing for services that you did not actually render;
  • billing for services that were not medically necessary;
  • billing for services that were performed by an improperly supervised or unqualified employee;
  • billing for services that were performed by an employee who has been excluded from participation in the Federal health care programs;
  • billing for services of such low quality that they are virtually worthless;
  • billing for services, medications or supplies on an automatic shipment plan where the patients do not need them; and
  • billing separately for services already included in a global fee, like billing for an evaluation and management service the day after surgery.
Sometimes there are improper marketing arrangements, illegal referral fees, payments to patients or referring doctors or other arrangements that help the government or insurance company show that the services were not medically necessary. There are a higher number of cases that proceed criminally where the illegal marketing or referral fees are used to show not medically necessary.
One way to avoid claims of intentional or negligent upcoding is to have a quarterly review of files every quarter to see how the documentation substantiates the billing. This is a compliance program and can be formal or informal. One advantage of a formal compliance program is that it can be a "safe harbor" the eliminates the exposure to criminal allegations.
Some providers are aware of the laws that the federal and state authorities impose and think that IF they do not accept Medicare or Medicaid/Medi-Cal patients and only bill private insurance, there will be no risk of criminal exposure. Often private insurers will audit and terminate a provider from a plan but not initiate criminal investigations. Private carriers have gotten far more aggressive and prosecutors see that since the Affordable Care Act that the private market it tied into the rates for federal and state health plans. Thus, the days of simply not paying or dropping contracts when there is improper billing by private insurers has ended given that patterns of improper billing can result in mail fraud, wire fraud, health care fraud and other state violations.

About the Author

Tracy Green

Past recipient of the Public Counsel Law Center's "Outstanding Advocate" Award, Tracy Green is a founding partner of Green & Associates. She combines more than 25 years of experience with a strategic...

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