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Overbilling, Upcoding, Unbundling, & Excessive Billing

When medical providers fraudulently unbundle and upcode their services, those unscrupulous healthcare organizations end up getting paid more money than they are entitled to receive from government funding programs like Medicare and Medicaid.

Overbilling, upcoding, unbundling, and excessive billing are just more ways to cheat taxpayers. The Department of Justice is interested in hearing from individuals with knowledge of these types of fraudulent practices.

If you have information about ongoing healthcare fraud schemes involving overbilling, upcoding, unbundling, or excessive billing, let our attorneys help you report to the Department of Justice and obtain a financial reward on your behalf.

What is Upcoding?

Upcoding refers to when a healthcare organization or provider delivers a particular medical service to a patient but uses a more expensive “code” when billing for the service. Healthcare providers receive government funds to carry out crucial medical treatments and procedures.

Many medical procedures and supplies are billed to Medicare, Medicaid, TRICARE, VA, or FEHB using “codes.” Specifically, office visits and medical procedures are often billed according to Current Procedural Terminology (CPT) Codes. This coding system relies on the word of healthcare providers and presents an opportunity for dishonest medical professionals.

What is Unbundling?

Unbundling occurs when codes which should be billed together are billed separately. Certain groups of related healthcare services or supplies must be “bundled” and billed under a single code.

However, a healthcare provider or organization can unlawfully obtain higher reimbursement from the healthcare programs by “unbundling” the services and billing under multiple codes. When hospitals or other healthcare providers engage in unbundling fraud, it can unlawfully maximize their Medicare and Medicaid payouts at the taxpayer’s expense.

Hospital Billing Fraud

Hospitals may bill to Medicare, Medicaid, TRICARE, VA, or FEHB for the services they provide to patients. Many hospital fraud cases involve hospitals:

  • Billing for patient visits at the highest severity level despite the patient’s needs being more benign
  • Billing for care that was administered by a physician despite a nurse or physician’s assistant actually administering the care
  • Billing at higher levels than the care rendered, resulting in significant overcharges to government healthcare programs
  • Unbundling codes for services which should be billed together instead of separately

Doctors & Upcoding

Doctors are responsible for documenting the care they administer to patients and must use standard billing codes to represent a particular service or procedure rendered to a patient.

Our firm has handled many upcoding fraud cases involving unscrupulous primary care doctors and specialty doctors. Psychiatrists, ophthalmologists, dermatologists, orthopedists, pain management doctors, and wound care doctors may use incorrect codes to receive funding for more expensive services than were actually rendered.

Examples of upcoding include billing for services which were never rendered or which were rendered unnecessarily, such as a full body CAT scan for a patient with a runny nose. It is especially easy for at-home caregivers to falsify the services they provided to at-home healthcare patients. Another type of upcoding is billing for doctor’s visits and reporting that they took longer than they actually did. Reporting a simple visit as a complex one could constitute upcoding in medical billing.

Examples of Healthcare Fraud and Abuse

Many instances of unbundling and upcoding constitute lab fraud, since most medical procedures rely on lab work. Healthcare providers who order unnecessary laboratory testing, or bill for tests which were never actually performed, could be on the hook for lab test fraud.

Lab Fraud Schemes

Individuals have also brought to the attention of the Department of Justice allegations that lab companies have performed tests that were medically unnecessary or paid kickbacks to other providers to refer patients for lab tests.

Fraud schemes involving labs or laboratories often involve Medicare, Medicaid, TRICARE, VA, or FEHB program overpaying for initial drug screens and confirmatory tests.

For example, it is unlawful to have a “standing order” that all patients have certain lab tests. Healthcare providers are required to customize orders for lab tests such as confirmatory urine drug tests based on each patient’s individualized risk assessment and circumstances.

Another testing lab company was required to pay $43 million for performing unnecessary lab tests on patients and billing Medicare and TRICARE. In this case, the individual who brought to light these allegations received a $6 million share of the government’s recovery. Without the whistleblower, the Department of Justice would have been unaware of the fraud, and the taxpayers would have continued to be cheated.

The Opioid Crisis & Medical Fraud

The Department of Justice has investigated and resolved a number of important cases against pharmaceutical companies for their role in the opioid crisis. We expect the Department of Justice to investigate other healthcare organizations and providers in the supply chain who contributed to the opioid crisis.

There are many players who may bear False Claims Act responsibility for the opioid crisis such as:

  • Healthcare providers that put patients at risk because they were paid handsomely by the pharmaceutical industry to prescribe opioids
  • Laboratories that churned out test results which put maximizing billing ahead of patient safety, or that used bundled tests or other fraudulent schemes to induce providers to bill for excessive drug tests
  • Rehabilitation clinics that admitted and discharged addicted patients through a revolving door rather than providing effective treatment options
  • Drug insurance plans that covered opioids with no prior authorization
  • Pharmacy benefits managers—the middlemen—that made access to opioids easier than less addictive alternative remedies

Holding these healthcare organizations and providers accountable for upcoding, unbundling, and excessive billing depends on knowledgeable insiders coming forward. There are anti-retaliation laws to protect whistleblowers who provide tips and helpful information to the government.

According to the Centers for Disease Control (CDC), well over one-half MILLION people have died from opioids. The Department of Justice has used information and tips from individuals to pursue healthcare providers and organizations that contributed to the opioid crisis.

For example, one drug company admitted that it engaged in illegal conduct by promoting a prescription drug that was a powerful opioid painkiller. Specifically, the drug company agreed to pay $225 million to resolve its criminal and civil liability for paying kickbacks and engaging in other unlawful marketing practices. The kickbacks included employment, lavish meals, and entertainment for the relatives and friends of the physicians who prescribed the drugs. The Department of Justice also alleged that the company improperly encouraged physicians to prescribe the drug for patients who did not have cancer and lied to Medicare and TRICARE about the patients’ cancer diagnoses.

Whistleblower Rewards & Recovery

Several individuals who reported the fraud were entitled to receive a share of the $225 million settlement as qui tam relators because they provided helpful information to the government to assist with the investigation.

The Department of Justice also recovered $1.4 BILLION from a global consumer goods conglomerate for fraudulently converting thousands of opioid-addicted patients over to another addictive opioid drug and causing state Medicaid programs to expand and maintain coverage of this drug at substantial cost to the government. This case was also the result of individuals who reported the fraud to the Department of Justice.

Another $600 MILLION was also recovered from a related entity for fraudulent marketing of the opioid-addiction-treatment drug. Again, this massive settlement was the result of numerous individuals reporting this fraud to the Department of Justice.

Further, a provider who owned pain management clinics in Kentucky and Georgia and performed medically unnecessary balance tests, nerve conduction procedures, and qualitative drug screens, paid $20 million under the False Claims Act. The three individuals who brought those allegations to the attention of the Justice Department were entitled to a significant portion of the government’s recovery of Medicare, TRICARE, and FEHB funds.

Anyone with information regarding overbilling, upcoding, unbundling, and excessive billing fraud schemes involving opioids by pharmaceutical companies, healthcare providers, labs, rehab clinics, drug insurance plans, or pharmacy benefits managers should retain a lawyer as soon as possible to ensure their rights as a whistleblower are protected. You may also be entitled to a financial reward if your case is successful.

Ask Our Attorneys about Overbilling, Upcoding, Unbundling, & Excessive Billing

Healthcare providers who knowingly report inaccurate billing codes to increase their reimbursement from Medicare, Medicaid, and other funding programs may be in violation of the False Claims Act. A brave whistleblower who sheds light on upcoding fraud taking place may be entitled to a significant financial award, depending on the circumstances. If you are unsure about what to do when you see someone unbundling and upcoding, contact our legal team for sound advice and professional guidance.

If you are aware of old, new, or evolving fraud schemes involving overbilling, upcoding, unbundling, or excessive billing, tell us about the information you have. We will provide you a free consultation.

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