Medical Billing Errors on Healthcare Claims — Fraud or Abuse?
In the context of medical coding, fraud involves intentional misrepresentation of services billed. Abuse refers to the falsification of information that was likely an innocent mistake but nonetheless representative.
In this Audit Spotlight, we focus on medical billing and coding errors made on healthcare claims, and a question that is frequently deliberated: does the error fall into the category of fraud or abuse?
Identifying Incorrect Coding and Billing on Healthcare Claims
ClaimDOC auditors use a common-sense approach in terms of identifying codes and services integral to other billed items and services. Just because providers can bill for or charge whatever amount they want does not mean they should. ClaimDOC auditors frequently identify noncompliance with billing, coding, and documentation guidelines and rules.
In the example below, a ClaimDOC auditor’s critical thinking skills and eyes on the claim identified and confirmed inappropriate billing and coding. These types of billing mistakes are rarely caught when claims merely go through an automated claims processing system.
Example
A Florida ophthalmologist billed for cataract surgery (CPT code 66984-LT), moderate sedation (CPT code 99152) and intraocular lens (CPT code V2632) performed in the office setting. The medical diagnosis listed on the claim was listed as H25.12, defined as age-related nuclear cataract, left eye. The three CPT codes and the listed diagnosis code are common services typically reported and billed by practitioners in the specialty of ophthalmology.
A red flag went up when the auditor reviewed two additional CPT codes reported and billed on the claim — CPT code 64708 — defined as neuroplasty, major peripheral nerve, arm or leg, open; other than specified — and code 64727 — defined as internal neurolysis, requiring the use of operating microscope.
Prior to pricing the claim, medical records were requested. After analysis of the member’s medical records for the date of service listed on the claim, it was determined the record documentation only supported the patient underwent cataract surgery of the left eye. The documentation did not support the two codes 64708 and 64727 billed and reported on the claim. These two codes comprised total charges of $1,500, which were denied due to being incorrectly billed and reported in error on the claim.
- Total billed charges: $5,550
- ClaimDOC pricing: $879.49*
The Takeaway
Services reported and billed by healthcare providers need to be audited for accuracy and compliance with coding and billing guidelines and rules. Internal monitoring and auditing is one of the seven key elements of an effective compliance and ethics program.
ClaimDOC’s Comprehensive Claims Review and Goals
The improper reporting of healthcare services, coding and billing errors, and egregious charges can complicate matters for members to understand their healthcare bills and payments, impact the collection of patient balances, build a reputation of providers charging high fees, create burdens for patients having no insurance and a host of others.
When an individual receives a bill for healthcare services appearing questionable or inappropriate, an inquiry to the provider and/or health plan should be made to obtain an explanation of the services, corresponding charges and reimbursement.
Our goal at ClaimDOC is to use benchmark charges and costs nationally to negotiate fair and ethical payments. Our high-quality and expert review of claims identifies and prevents improper medical claim payments and maximizes long-term cost savings opportunities. Employers turn to us seeking to establish fair reimbursement rates for their plans allowing them to save money and provide richer benefits to their employees. A win-win for everyone.
*Based on Medicare and markup.
Background
ClaimDOC’s comprehensive line-by-line review of claims uncovers errors that basic claim repricing and auto-adjudication does not catch, leading to greater savings for health plans and its plan members. Our audit team analyzes all types of healthcare claims for a variety of potential concerns including excessive usual and customary charges, duplication of claims, incorrect coding, unbundling of services and many others. Our claims review is not intended to impact care decisions or medical practice.