Medical Billing and Coding Professionals and the Pressure to Commit Fraud

In recent years the Medicare and Medicaid programs have lost an estimated $2.3 billion to fraud. It is every private practice doctor’s or hospital’s worst nightmare to see a team of federal agents surrounding their premises as part of an investigation into fraudulent billing.

However this is exactly what happened in February of 2011 when 700 federal agents assembled themselves into strike force teams in nine different cities to take into custody 111 healthcare providers across the nation. These individuals were arrested on charges relating to kickbacks, identity theft, money laundering, fake medical billing and coding operations, plus identity theft, all totaling more than $225 million in fraud.

As demonstrated through several recent high-profile events, those in the medical billing and coding profession are at times tempted to commit fraud. Like most professions, the responsibilities and trust held by medical billers and coders is sometimes abused, and even the best-intentioned professionals in this field may become corrupted. Administrators, doctors, and supervisors – often times the contracting party or superiors of medical billing and coding professionals – are frequently the ones who exert this pressure on billing professionals.

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Since 2007 the Inspector General’s Office of the Department of Health and Human Services (DHHS) has coordinated federal operations that have netted around 1,000 suspects involved in government medical program fraud, in what a spokesman for the DHHS calls the tip of the iceberg. Some of the more notorious cases involve:

  • A Brooklyn proctologist who billed Medicare for $6.5 million in procedures which for the most part never happened
  • Several Miami healthcare professionals who gave their patients back rubs and charged Medicare $57 million for physical therapy sessions
  • A Detroit podiatrist who clipped patients’ toenails and charged Medicare $700,000 for partial toe nail removals

A recent July 2013 sentencing of Cassandra Little from Reno ordered her to pay over $81,000 in restitution on top of her nearly two-year prison sentence for her involvement in a health care fraud and money laundering operation. Her partner in crime, Susan Hill, was ordered to pay the same amount in restitution and received a year and a half in prison. This came as the result of an investigation which found the two business partners defrauded Nevada’s Medicaid program of $1 million in services they did not provide.

The owners of Mobile Doctors, a medical billing and coding company serving the regions where its offices are located – Chicago, Saint Louis, Flint, Austin, San Antonio, Indianapolis, Phoenix, and Kansas City – were recently arrested on charges relating to tens of millions of dollars in Medicare upcoding fraud, the term used for the illegal practice of billing Medicare for increased amounts that are associated with more involved patient interactions than those which actually take place.

With the prominence of such cases one wonders why medical billing and coding professionals would risk committing fraud and ruining their careers, even when they are often not the ones who benefit most from this criminal activity. Based on case studies there are three explanations:

  • They are encouraged to do so by their superiors or business partners
  • They are motivated by personal gain
  • They feel justified because of government policy or regulations, personal, and other circumstances

If moral grounds are not enough for medical billing and coding professionals to resist the temptation to commit fraud, a simple cost-benefit analysis can be used. Is risking a career capable of legally earning millions of dollars over a lifetime worth ruining for a short-term gain that comes with a significant amount of added stress and potential fines, a criminal record, and a prison sentence?