Healthcare Fraud Coding Error Defense Lawyer

Healthcare Fraud Coding Error Defense

For healthcare providers, submitting accurate medical coding is vital for obtaining proper reimbursements from private insurers and government healthcare programs.

This process directly impacts the financial and ethical integrity of healthcare practices. For that reason, coding errors (especially significant or repeated errors) can sometimes raise red flags with federal agencies, potentially leading to allegations of insurance fraud and suspicions of violating the False Claims Act (FCA).

Coding errors lead to allegations of healthcare fraud and suspicions of violating the False Claims Act (FCA).

With the aggressive enforcement of healthcare fraud, even honest mistakes can lead to civil or criminal prosecution by the U.S. Department of Justice (DOJ). In some cases, this increases the risk of civil liabilities, criminal charges, and reputational damage.

Billing and coding errors are among the most common forms of healthcare fraud. Honest mistakes can potentially lead to charges under the False Claims Act's broad prohibitory language.

Furthermore, with the Medicare Fraud Strike Force's use of data analytics and algorithms that automatically compare providers' program billings, providers of all types and in all geographic regions are being targeted for enforcement of healthcare fraud.

Civil vs. Criminal Charges

If a fraud enforcement action leads to civil or criminal charges, the consequences are severe and potentially practice-threatening. This underscores the importance of vigilance and adherence to compliance standards in healthcare practices.

Thus, physicians and other healthcare providers must maintain active and effective compliance programs, and they must take immediate action upon learning of a mistake or upon being contacted by federal authorities.

This proactive approach can help mitigate potential risks and ensure the ethical and financial integrity of your practice. If you are under scrutiny over possible FCA violations, here's what you need to know.

Are Billing and Coding Errors Considered Healthcare Fraud?

The simple answer is yes. If you made a mistake and accidentally overbilled Medicare, you could be guilty of fraud. This is a common concern among healthcare providers who rely on federal program funds to maintain their practices.

The False Claims Act has provisions that are particularly relevant to healthcare providers who bill Medicare, Medicaid, Tricare, and other federal healthcare benefit programs.

These include the prohibition of all knowingly made false and fraudulent claims, as well as the statute's provisions for civil and criminal penalties.

A reimbursement request based upon a billing or coding error is considered a "false" claim under the FCA. This violation of the statute, even if unintentional, is considered a form of fraud against the government. Understanding these legal definitions is crucial for healthcare providers to navigate the complex landscape of healthcare billing and coding.

This could potentially initiate civil liability, as the FCA's civil enforcement provisions do not require bad intent to establish culpability.

Suppose DOJ prosecutors, the Medicare Fraud Strike Force, or any other federal law enforcement agency find evidence of intent, which may be inferred from repeated violations or failure to maintain an up-to-date compliance program. In that case, they have the option to pursue federal criminal charges.

Under 18 U.S.C. § 1349, merely agreeing to participate in a scheme to defraud a federal health benefit program is a crime known as a healthcare fraud conspiracy.

Examples of Common Billing and Coding Errors

Healthcare providers must maintain vigilance over their billing processes, as even unintentional errors can invite scrutiny.

Any billing or coding mistake that results in an unwarranted request for payment is possibly a prosecutable error under the False Claims Act. Some of the most common types of billing and coding mistakes prosecuted under the FCA are discussed below.

Upcoding

Upcoding occurs when a healthcare provider submits claims for services at a higher level of complexity than those actually rendered. For example, using a higher-level Evaluation and Management (E/M) code while the documentation supports only a lower-level code. This practice can falsely inflate reimbursements, raising red flags with payors.

Incorrect Billing Code

Using an incorrect billing code is perhaps the simplest form of billing or coding error that can initiate liability under the FCA. Whether you were relying on outdated billing guidance or simply made a mistake, submitting an incorrect billing code, intentionally or unintentionally, is considered a form of healthcare fraud.

Unbundling

Unbundling involves billing separately for procedures that should be combined under a single Current Procedural Terminology (CPT) or Diagnostic-Related Group (DRG) code. For instance, charging for each step of a surgical procedure individually, rather than using the comprehensive code that includes all components, constitutes unbundling.

Adding Modifiers to Billing Codes

The Centers for Medicare and Medicaid Services (CMS) permits the use of modifiers with billing codes only under specific and limited circumstances. Adding modifiers inappropriately, such as adding Modifier 25 to Code L8679 for a routine P-Stim procedure, could potentially trigger scrutiny under the False Claims Act.

Billing for Services Not Rendered

One such error is 'phantom billing,' which involves submitting claims for services or procedures that were never performed. This could include billing for missed appointments, nonexistent patients, or creating entirely falsified records of treatments. Such actions are considered serious offenses and can lead to legal scrutiny.

Duplicate Billing

Duplicate billing happens when the same service or procedure is charged more than once. This can occur either for a single patient or across multiple payors, leading to excessive and unjustified reimbursements.

Misrepresenting the Provider of Service

This error occurs when the claim uses the National Provider Identifier (NPI) of someone who did not perform or supervise the service. An example is the misuse of "incident-to" billing, where services rendered by a subordinate are improperly attributed to a supervising physician.

Billing Without Proper Documentation

Submitting claims unsupported by adequate documentation is a frequent error. Missing physician signatures, incomplete medical records, or insufficient justification for the procedures billed can all lead to allegations of fraud.

Falsifying Diagnoses to Justify Procedures

Some providers may intentionally or unintentionally assign inaccurate diagnosis codes to meet medical necessity requirements for costly tests or procedures, for instance, by using an exaggerated diagnosis to secure approval for high-cost diagnostic testing.

Billing for Medically Unnecessary Services

This error occurs when submitting claims for procedures or tests that lack clinical justification. Some providers may order and bill for extra tests solely to increase revenue, which can attract legal scrutiny.

Billing for Non-Covered Services as Covered

This occurs when non-reimbursable services are mischaracterized as medically necessary or as covered items under government or private insurance plans.

Billing for Services Rendered by an Unlicensed Provider

Federal program reimbursement is available only for services rendered by licensed medical providers, provided that these providers have not been previously excluded from participation in the program. Billing for services rendered by an unlicensed or excluded provider can result in fraud charges under the FCA, even if the provider is not directly affiliated with your practice.

Possible Criminal Penalties for Violations

Allegations of coding errors resulting in FCA violations can escalate quickly. The law takes a strict stance on fraudulent activities involving government healthcare programs, such as Medicare and Medicaid. Violations may lead to the following consequences:

Civil Penalties: Organizations found liable under the FCA may face treble damages (three times the government's losses), plus fines ranging from $13,508 to $27,018 per claim, depending on inflation adjustments.
Criminal Charges: Knowingly submitting false claims can result in criminal charges, carrying the potential for imprisonment. Individuals face fines of up to $250,000 and up to five years in federal prison per violation. Corporations may incur fines of up to $500,000.
Exclusion from Federal Programs: Providers found guilty may be barred from participating in federally funded health programs, causing significant financial and reputational harm.

Common Defenses to Coding Errors

Defending against coding-related allegations requires a thorough understanding of medical billing and the circumstances that led to the alleged errors. Depending on the circumstances of the case, a federal criminal defense attorney with experience in FCA cases may utilize one or more of the following defenses to mitigate criminal liability for coding errors:

Lack of Intent: Unintentional errors are not considered fraud; documenting corrective actions can support a good-faith defense.
Clerical Mistakes: Minor, non-systemic errors like typos or automated billing issues can be defended if corrected promptly.
Faulty Software: Errors caused by reliance on billing software can be mitigated by demonstrating efforts to resolve the issue.
Ambiguous Guidelines: Misunderstandings due to complex or outdated coding regulations may support a defense of unintentional mistakes.
Voluntary Reporting: Proactively identifying and reporting errors shows responsibility and reduces the likelihood of prosecution.
Showing Compliance Efforts: Providing evidence of a strong compliance program in place to catch and prevent coding errors.

If your healthcare practice is being targeted in a federal investigation as a result of alleged billing or coding violations, you must speak with an attorney immediately.

Our healthcare fraud defense attorneys assist service providers and businesses under investigation for alleged violations of the Qui Tam Lawsuit, Stark Law, False Claims Act, or Anti-Kickback Statute.

For more information, contact our federal criminal defense law firm, Eisner Gorin LLP, located in Los Angeles, California.

Coding Error Defense