One of the more common ways that health care providers can defraud the Government is through coding violations. In order to bill either a private insurance company (such as Blue Cross Blue Shield) or a government health care program (such as Medicare, Medicaid, or TRICARE) for payment, a health care provider must enter a numerical “Procedure Code” [generally a CPT (“Current Procedural Terminology”) code or HCPCS (“Health Care Common Procedure Coding System”) code] that corresponds with the specific type of care provided to the patient. Government health care programs, such as Medicare, Medicaid, and TRICARE, pay a set amount for each code entered.
Two types of coding violations that often form the basis for claims under the False Claims Act are “upcoding” and “unbundling.” Upcoding is the fraudulent practice of entering a procedure code for a more expensive type of treatment than that which was really provided. This practice is being utilized with increasing prevalence by physicians and other health care providers and has cost Medicare and Medicaid billions of dollars.
“Unbundling” is the billing of separate procedures or tests that are typically performed together, rather than entering one procedure code that covers all of the procedures. The combined reimbursement of the separate procedures is typically higher than the reimbursement for the one comprehensive code, and, thus, government programs end up paying more for procedures when health care providers engage in this fraudulent billing practice.
Real World Examples of Recent Health Care Coding Violation False Claims Act Cases:
- 2012: NextCare paid $10 million to settle a whistleblower False Claims Act lawsuit alleging that the company engaged in upcoding and billed Medicare and Medicaid for medically unnecessary procedures. The whistleblowers, one of which was represented by Rabon Frazier LLP, shared in a $1.6 million award as a result of the settlement.
- 2011: The City of Dallas paid $2.47 million to resolve a lawsuit filed under the False Claims Act and state law alleging that over a four year period the city upcoded ambulance transport claims submitted to Medicare and Medicaid. Specifically, the city coded every 911-dispatched transport at the advanced life support level rather than the basic life support level, regardless of the patient's condition or the type of care given. A former employee of the city filed the whistleblower lawsuit.