Keeping Your Emergency Department Safe From Medical Billing Fraud

Federal, state, and local governments have been aggressively working together to eliminate the billion-dollar medical billing fraud problem.

Rather than spending the money paying out fraudulent claims, the government is now routing their funds to seek out and bring medical claim abusers to justice.

With the increase in funds earmarked for audits and investigations, emergency medicine groups must take extra steps to avoid healthcare billing fraud at their emergency departments or face severe fines, penalties, and sanctions — including potential prison time.

We’ve discussed the consequences of medical coding and billing errors (and how to avoid them) in a previous guide; but in this post, we’ll go over the basics of medical billing fraud, cover a few examples of Medicare/Medicaid fraud, and highlight the best ways to keep your EM group safe.

Medical Billing Fraud: The Basics

Healthcare billing fraud often comes down to medical coding and compliance. Each service your team provides corresponds with its own Current Procedural Terminology (CPT) and Healthcare Common Procedure Coding System codes. Claims for services are then submitted to insurance companies, Medicare, Medicaid, etc. with these codes.

Medical billing fraud occurs when there’s evidence of misrepresentation which leads to your group’s monetary gain (or other unearned benefits) over a long period of time and across many patient records. This fraud can be inflicted upon both insurance companies and the government.

Common Examples of Healthcare Fraud

The most common examples of healthcare fraud include:

• Kickbacks
• Submitting false claims to CMS for payment
• Billing for “ghost” patients
• Billing for services not provided
• Billing for equipment/devices not provided
• Upcoding
• Unbundling services for separate billing
• Lack of medical necessity
• Overutilization of medical procedures/services

Medicare/Medicaid Fraud and The Federal Civil False Claims Act (FCA)

Submitting false or fraudulent claims to the government (via Medicare and Medicaid), either with or without intent, violates the Federal Civil False Claims Act (FCA). Any medical provider that keeps the money paid by the government for their false claims also violates the FCA.

Federal False Claims Act (FCA) Penalties, Sanctions, and More

The penalties for violating the FCA could mean the end for an emergency physician or healthcare entity, including:

Penalty Fines

Penalties are calculated on a per-claim basis. The government can recover[*]:

• Up to three times the amount they paid your EM group per false claim
• A penalty of up to $23,331(as of 2020) per false claim filed 
• A fine up to $250,000 if you knowingly falsified claims
• Up to $50,000 per violation of the Anti-Kickback Statute – and a fine three times the amount of the kickback
• The costs of bringing the case to trial

Permanent Medicare/Medicaid Exclusion and/or Other Career-Endings

You may be denied from ever being an approved medical provider in the Medicare/Medicaid system. Losing this over-55-million-member strong network would be a serious blow to your revenue.

You may also lose your license, DEA registration, staff privileges, and have payment for outstanding invoices suspended.

Even if you prevent exclusion during a settlement deal, you’ll still be forced to comply with continuous monitoring by the government for many years, and you’ll pay additional fines for years to come.

Imprisonment

Because the government can’t imprison a healthcare entity or corporation, individuals found committing fraud, and the individuals in control of the organization (such as a CEO, CFO, or medical director), can face criminal prosecution.

Besides the $25,000 fine, you’ll also face prison times for[*]:

• Healthcare Fraud: Up to 10 years (up to 20 years if bodily injury was incurred)
• Conspiracy to Commit Healthcare Fraud: Up to 20 years
• False Claims Act Convictions: Up to 5 years per claim, or up to life if convicted of multiple claims.

When you add up all the damages and penalties per claim, it’s easy to see how violating the FCA could result in millions of dollars in restitution, bankrupt an emergency medicine group, and destroy a career. 

Despite the severe penalties for billing for services not rendered, upcoding, and other fraudulent behavior, people still continue to cheat the system.

Examples Of Medicare/Medicaid Fraud

We don’t need to name names to learn from their mistakes, but seeing these examples of Medicare/Medicaid fraud in action will show you what your EM group may be up against:

Upcoding Emergency Department Patients for Inpatient Services[*]

A former nurse alleged that her hospital and it’s owner submitted false claims to Medicare for billing for inpatient services while patients were still waiting in the emergency department. On paper, when patients get out of the ED, they can be billed for more expensive service, so administration instructed staff to “upcode as many revenue codes” as possible.

$16 Million Settlement for Overbilling Medicare/Medicaid[*]

A healthcare organization was ordered to pay $16 million to settle FCA violations in Atlanta. Case managers overruled treating physicians and billed at a more expensive inpatient rate although patients could have received less costly outpatient care. They also violated the Anti-Kickback Statute by purchasing a cardiology group above fair market value.

Tennessee Hospital Settles FCA Allegations After Self-Disclosing[*]

An internal investigation led to the discovery of a regional hospital using inappropriate codes for stroke, respiratory infection, simple pneumonia, and septicemia patients. They self-disclosed these findings to the government and agreed to settle FCA allegations for $1.7 million.

The Justice Department commended the hospital for it’s “transparency and diligence,” and the hospital has implemented new protocols to address and avoid the issue in the future.

$40 Million Medicare Device Fraud in Florida[*]

A doctor lost his medical license and was sentenced to 18 months in prison for signing orders for medically unnecessary arm, knee, and wrist braces. Though the doctor billed Medicare for the devices at a cost of $7.6 million personally, he was part of a $40 million scheme with several others.

$900 Million in Kickbacks in California[*]

The former owner of a California hospital received 15 months in prison for his role in a kickback scheme totaling over $900 million in fraudulent claims. The doctor paid physicians, chiropractors, and marketers to refer patients to his hospital for services. He forfeited $1 million to the government and paid a $60,000 fine.

Nine Physicians Charged in $2B+ Healthcare Billing Fraud Scheme[*]

Nine physicians and 26 other individuals were charged in one of the largest medical billing fraud schemes ever. According to prosecutors, laboratories paid illegal kickbacks and bribes to medical professionals working with fraudulent telemedicine companies. They referred Medicare beneficiaries for medically unnecessary cancer genetic tests, submitting over $2 billion in fraudulent claims.

The Best Ways to Help Your Emergency Department Avoid Healthcare Billing Fraud

Healthcare fraud and compliance is an ongoing challenge you’ll need to face head-on to stay ahead. These three tips may help prevent medical billing fraud at your ED:

1. Ongoing Education

Emergency physicians and staff must keep up with new rules and regulations for emergency medicine billing to ensure they’re not unknowingly miscoding claims. Medicare/Medicaid billing manuals/procedures can be overly complicated, and coding errors and simple misunderstandings could lead to adverse consequences.

However, continuing education requires a significant amount of time and energy, as does learning new emergency billing software. All of this can take away time and resources from physicians and staff that should be devoted to patient care.

2. Encourage a Safe Space for Whistleblowers

Healthcare billing fraud investigators find confidential informants via current and previous employees to assist in the gathering of evidence and prosecution. Patients and staff who file Medicaid fraud Whistleblower lawsuits may receive up to 30% of the recovered money. 

With this type of incentive, it’s important to encourage a safe space for Whistleblowers to speak up about errors or behaviors they may consider to be potential fraud. Practices may then be able to address and settle issues discreetly and with lower financial ramifications.

3. Outsource Your Medical Coding and Billing

It’s not uncommon for emergency medicine groups to outsource emergency department services like medical coding and billing, denial management, and other payment management services.

The benefits of outsourcing hospital ER billing include:

1. Fewer errors
2. Lower expenses
3. Higher revenue
4. Better cash flow
5. Greater staff focus
6. Higher patient satisfaction
7. Easier adherence to compliance
8. More consistency

But there’s a big difference when it comes to compliance between outsourcing your emergency department coding to a US-based company versus offshoring ED coding, and the few dollars you may save aren’t worth everything you may lose.

At DuvaSawko, All Our Coders Have Nationally-Recognized Coding Credentials

In the quest to make a positive impact on the US economy, DuvaSawko employs only US-based coders. We boast some of the best billing outsourcing options for EDs seeking high-quality emergency medicine revenue cycle management partners.

Our quality control and compliance program is designed to adhere to all relevant standards, ensure that staff is adequately trained, monitor the continually changing regulatory environment, and implement timely changes to maintain compliance.

As such, each of our coders is assigned to specific clients for familiarity, consistency, and service continuity. 

The National Industry Standard Benchmark For Accuracy: 3%

The Duvasawko Benchmark For Accuracy: 5%

Check out the DuvaSawko Medical Billing Calculator now to see where you may be losing valuable reimbursement dollars. Collect this money, and you can offset the cost of outsourcing your billing and also avoid medical billing fraud.