Coding Fraud

What is coding fraud?

Coding fraud involves the knowing submission of claims to government insurers with incorrect billing codes, diagnostic codes, units of service, dates of service, or service providers.

Health care providers can violate the False Claims Act by knowingly submitting claims for payment to Government insurers with incorrect billing codes, diagnostic codes, units of service, dates of service, or service providers. One common form of coding fraud that often serves as a basis for qui tam whistleblower lawsuits is “upcoding,” i.e., applying a higher billing code to professional services than is warranted, in order to fraudulently maximize reimbursement.

When a physician or other health care professional provides medical services to a patient, the service or procedure is billed under a specific code known as a “CPT code” (the term CPT is short for “Current Procedural Terminology.”) To bill a service under an appropriate CPT code, the healthcare professional must perform and document certain things. For example, when an established patient visits a doctor’s office, the doctor (or staff) will take a history, the doctor will conduct a physical examination, and the doctor will make a diagnosis that involves varying degrees of medical complexity. Taken together, the doctor’s work will be reflected in a CPT code that should correspond as closely as possible to the amount of time and skill the doctor had to use in treating the patient.

Other types of coding fraud that may serve as the basis of a qui tam False Claims Act lawsuit include: 1) billing for services provided by medical residents, nurses, or other staff under CPT codes that require a physician to personally perform, direct, or supervise the service; 2) inflating the units of service provided; 3) “unbundling” i.e., billing separately for components of a related group of procedures or tests; and 4) “split billing,” i.e., billing for treatment performed in a single visit as if it occurred over multiple days.

VSG’s Qui Tam Attorneys Are Experienced in Handling Coding Fraud Cases

A VSG attorney represented a qui tam whistleblower in a significant False Claims Act case against a billing service that was systemically upcoding the level of professional services rendered by doctors in hospital emergency departments throughout the nation. In U.S. ex. rel. Semtner v. Medical Consultants, Inc., et al. (and a companion case, U.S. ex rel. Trim v. McKean), the relator (whistleblower) alleged that a nationwide billing service, Emergency Physicians Billing Services, was systemically overcharging Medicare for services rendered by emergency physicians, engaging in an upcoding practice that was called “presumptive coding.” Essentially, the billing service was systematically coding emergency visits at higher levels than were justified, resulting in the submission of inflated claims to the Medicare, Medicaid, and TRICARE programs. After a non-jury trial and a court finding that the defendants were liable, see 31 F. Supp. 2d 1308 (W.D. Okla. 1998), the United States recovered approximately $28.8 million, and the client was awarded $5.8 million.