Fraudulent Billing and Abuse Claims: The Integrity of Medical Records

November 10, 2018

Fraud is the intent to deceive, and abuse is the intent to confuse. There are multiple ways in which fraud and abuse can impact a plastic surgery practice. Not only can fraud and abuse have a very negative effect on the outcome of a malpractice case, but in many states, a fraud conviction can both jeopardize your medical license and raise the potential for criminal liability.


Fraudulent billing practices are a primary concern in any practice that seeks to avoid liability for insurance fraud. One way of protecting against insurance audits (or regulatory agency audits) is to assure your medical billing and coding conforms to your operative record and treatment notes. Though it is a fairly common practice to change billing codes as the procedure or course of treatment progresses, you must be consistent when adjusting the billing codes to reflect the actual procedures and treatments performed.


Another place where physicians have exposure to fraudulent practices is the preparation and maintenance of the medical record. In addition to fraud claims, altering a medical record can also expose you to both civil and criminal penalties. Experts and fraud investigators are able to detect many types of changes to medical records and forms.  Document examiners have tools that can detect two or more different handwriting styles on the same page, and whether entries are made at a later date, after the patient has been discharged. Your office needs to adopt and follow best practices when it comes to documenting patient care, revising and correcting a medical record or operations report, and creating billing codes that reflect such care. 


Fraudulent concealment is another type of fraud that can plague a physician’s practice.  If a patient relies on false or misleading information to seek your services or consent to treatment, they may be able to bring a fraudulent concealment claim against you and your practice.  This can arise through false advertising, puffery as to your experience or past patient results, or misrepresentations in patient consultations. Because such claims fall under the umbrella of fraud, they are typically excluded from coverage by your malpractice insurance policy, and you will be solely responsible for defending the claim, resolving it by settlement, or paying a judgment.  Additionally, fraudulent concealment extends the time that a former patient has in which to file a claim; though state statutes provide a time limit in which to file a malpractice or negligence claim, that clock does not start running until the patient has discovered that the promise or representation was false or misleading. 


Your employees or contractors can also be a source of claims that you have engaged in fraudulent practices if they become whistleblowers. The federal false claims act rewards such whistleblowers by allowing them to file a suit against you for making fraudulent claims; the federal government joins the lawsuit; and the whistleblower is allowed to collect a percentage of any settlement or judgment. In this way, former employees and contractors are incentivized to root out fraudulent and misleading practices. This emphasizes the need for appropriate, accurate and ethical billing and coding, as well as identifying and eliminating disgruntled employees from the workplace.


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