How to identify fraud, waste and abuse

How to identify fraud, waste and abuse

Q: What is fraud, waste and abuse?
A: Fraud:
 An intentional act of deception, misrepresentation or concealment in order to gain something of value. Examples include: 
  • Billing for services that were never rendered 
  • Billing for services at a higher rate than is actually justified
  • Deliberately misrepresenting services, resulting in unnecessary costs to the Health Plan, resulting in improper payments to providers or over-payments

Waste: Over-utilization of services (not caused by criminally negligent actions) and the misuse of resources.

Abuse: Excessive or improper use of services or actions that are inconsistent with acceptable business or medical practice. Refers to incidents that, although not fraudulent, may directly or indirectly cause financial loss. Examples include:

  • Charging in excess for services or supplies
  • Providing medically unnecessary services
  • Billing for items or services that should not be paid for by Medicare or Medicaid

Q: What kinds of fraud, waste or abuse should I report?
Some of the most common coding and billing issues we see are:

  • Billing for services and/or supplies not received. This includes billing Medicare for appointments that the patient failed to keep
  • Billing for services at a frequency that indicates the provider is an outlier as compared with peers
  • Offering or performing services that you do not need in order to charge Medicare for additional services
  • Billing non-covered or non-chargeable services as covered items
  • Billing for services that are actually performed by another provider
  • Up-coding
  • Unbundling
  • Billing for more units than provided/given
  • Lack of documentation in the records to support the services billed
  • Services performed by an unlicensed provider but billed under a licensed provider's name
  • Alteration of records to get services covered
  • Telling you that Medicare will pay for something when it won't
  • Continuing to bill Medicare for rented medical equipment after you have returned it
  • Fraud may appear in multiple forms, such as:
    • Incorrect reporting of diagnoses or procedures to maximize payments
    • Billing that is duplicated for the same services or supplies, billing both Medicare and the beneficiary for the same service, or billing both Medicare and another insurer in an attempt to get paid twice
    • Altering claim forms, electronic claim records, medical documentation, etc., to obtain a higher payment amount
    • Soliciting, offering or receiving a kickback, bribe or rebate, e.g. paying for a referral of patients in exchange for the ordering of diagnostic tests and other services or medical equipment
    • Completing Certificates of Medical Necessity (CMNs) for patients not personally and professionally known by the provider
    • Misrepresentations of dates and descriptions of services furnished or the identity of the beneficiary or the individual who furnished the services
    • Using another person's Medicare card to obtain medical care
    • Using the adjustment payment process to generate fraudulent payments

Q: What is up-coding?
Upcoding refers to a provider's use of Current Procedural Technology (CPT) codes to bill a health insurance payer for providing a higher-paying service than was performed.

Example: Dr. Wrong diagnoses Mrs. Patient with a broken leg. Mrs. Patient's broken leg was really just a hairline fracture. Dr. Wrong told her to be careful and stay off her leg for a few weeks and use crutches.

However, Dr. Wrong submitted the bill to the insurance company claiming he put his patient's leg in a cast. He later submitted a bill for removing that cast. Both billed services would pay him more than what he did to care for Mrs. Patient. By using different codes than what Dr. Wrong performed, he is committing up-coding.

Q: What is unbundling?
 Unbundling is a fraudulent practice in which a single all-inclusive service code, e.g. blood or chemistry panels, are broken down to individual service codes, resulting in higher payment by the insurance company. Two types of practices lead to unbundling. The first is unintentional and results from a misunderstanding of coding practices. The second is intentional and is used by providers to manipulate coding in order to maximize payment.

Q: I received an Explanation of Benefits (EOB) for services I did not receive. Is this fraud?
 Possibly. Billing for services you did not receive is one of the most common types of health care fraud committed by providers. However, it may be a simple mistake. Always report erroneous charges to us, we will thoroughly research the charges and determine whether it is fraud or just a simple billing error.

Q: My physician billed my health plan for an office visit when all I did was pick up a prescription. I never saw my physician. Can I be charged for this?
 No. This would be considered billing for services not provided, and you should report this to us immediately.

Q: I think my physician may be billing fraudulent charges. If I report this, and you later confirm that no fraud was committed, will my provider know that I reported him or her?
 You are not required to identify yourself when reporting suspected fraud. You should never be afraid to report your physician for suspicions of fraudulent billing or inappropriate behavior. We take every complaint seriously and are committed to protecting your confidentiality. Remember, if the provider is filing fraudulent charges under your coverage, then he or she is most likely filing false charges under other patients' coverage as well.

REMEMBER: To protect yourself from fraud, thoroughly review your Explanation of Benefits (EOB) after you receive health care services. If you see something that looks inaccurate, you should report the situation right away.

For Samaritan Advantage members only:
Protecting Medicare Future Generations (PDF)
Identity Theft Protection (PDF)
Detecting Home Health Fraud (PDF)
Reporting Medical Transport Fraud (PDF)
Reporting Health Insurance Marketplace Fraud (PDF)
Questioning Free Medical Supplies (PDF)
Reporting Services Not Provided (PDF)

Government resources for all members:
National Benefit Integrity MEDIC website 
Stop Medicare Fraud website
For Medicare Managed Care or Prescription Drugs: 1-877-7SafeRx (1-877-772-3379)
The Patient Protection and Affordable Care Act 
Compliance Guidance for Medicare+Choice Organizations 
Office of the Inspector General, Compliance Program Guidance for the Healthcare Industry website
Federal Sentencing Guidelines
Fraud Alerts, Bulletins and Other Guidance from the OIG
False Claims Act
Health Insurance Portability and Accountability Act (HIPAA)
Anti-Kickback Statute (see section 1128B(b))
Stark Law (Physician Self-Referral)
TRICARE Fraud & Abuse

Additional resources for all members:
Health Care Administrators Association (HCAA)
Heath Care Compliance Association (HCCA) website
Society of Corporate Compliance and Ethics (SCCE) website 
American Health Lawyers Association (AHLA) website 
National Health Care Anti-Fraud Association (NHCAA) website
Institute for Health Care Improvement (IHI) website 
Corporate Responsibility and Health Care Quality – A Resource for Health Care Boards of Directors, U.S. Dept. of Health and Human Services Office of the Inspector General and The American Health Lawyers Assn.
OIG and GSA Exclusions Databases: 
General Services Administration (GSA) database of excluded individuals/entities