Fraud or abuse?
By Deborah Green, Esq.

Is there a difference between fraud and abuse and, if so, how does it impact me?

The difference between fraud and abuse is generally just one degree. An act of fraud requires an actual intent to deceive someone else deliberately.

If services or payments are obtained by telling lies, falsifying documents, or otherwise intentionally misrepresenting the truth, the activity is fraudulent. Patients, doctors, and suppliers (and their employees, if they knowingly aid and abet the fraud) may be prosecuted for fraud.

Abuse is generally considered a lesser offense and usually refers to "incidents and practices" that directly or indirectly cause financial losses to the Medicare program, a third party payor, or to beneficiaries and their families.

Abuse may also include practices inconsistent with accepted and sound medical or business habits — excessive charges or unnecessary costs to the Medicare program or third party payor, improper billing practices, payment for services that do not meet recognized standards of care, and payment for medically unnecessary services, for example.

Abuse escalates to fraud if the person committing the abuse knew, or should have known, the activities were abusive.

Examples of fraud include:

• Asking for, offering, or receiving a kick back, bribe, or rebate for the referral of patients;
• Completing a certificate of medical necessity when you do not personally and professionally know the patient;
• Providing incomplete, false, or misleading information about physician ownership of a clinical laboratory;
• Repeatedly charging patients covered by insurance more than the permitted amounts, or repeatedly violating a participation agreement or assignment agreement;
• Altering claim forms to increase payments;
• Billing for services or supplies not provided, including when a patient did not keep an appointment;
• Persistent upcoding;
• Arranging to get paid twice for the same service by billing Medicare and the patient, or Medicare and another third party insurer;
• Misrepresenting the services performed, how much you charged, date of service, or the patient's identity;
• Scheming with a patient to manipulate claims and increase payments;
• Using the adjustment payment process to generate fraudulent payments; and
• Billing procedures throughout a period of days when all treatment occurred during one visit.
Examples of abuse include:
• Ignoring the balance billing limits for unassigned claims;
• Charging Medicare patients, who have assigned their claims to you, more than 20 percent of the Medicare approved amount;
• Billing Medicare patients for charges disallowed by a carrier;
• Violating a participation agreement;
• Billing Medicare at a higher or different rate compared to your "usual charge" for private patients;
• Billing Medicare when another insurer should be billed; and
• Submitting claims for services that are not medically necessary or by giving a battery of tests when only one test is needed.

When a carrier performs a review, it looks for payment abnormalities or unusual service patterns. If your statistical data varies greatly from those of your peers, it may suggest you are ignoring standard practices, Medicare rules, and are abusing the system.

An investigation by Medicare or a third-party carrier is costly and time-consuming, even if no fraud or abuse is found. Make sure you can substantiate all services rendered and all charges billed.

Document as if your career depended upon it — it just might. Make sure you periodically review bills being sent on your behalf and that the services rendered are being coded correctly.

Deborah Green practices law in New York and Florida. If you have any questions concerning legal heathcare issues, e-mail her at healthattorney@aol.com or call 954-923-0923.

DISCLAIMER: This column is provided for educational purposes only. The information presented is not as legal advice with respect to any matter and that no attorney-client relationship is hereby established.