Healthcare organizations lose millions of dollars every year to settle lawsuits due to improper
billing in healthcare. While legal hassles and case settlements are common in every industry in the
USA, healthcare lawsuits strike otherwise since most of the laws governing the settlement do not
need any proven case of intent. Thus the actual cost of improper billing in healthcare goes much
beyond the usual finances. Any instance of lawsuits of fraudulent billing made against the
organizations costs the institutes not only in dollars but also trust and reputation.
The pandemic for the last two years has severely caused the organizations dearly in terms of
finances. Even with the vaccination numbers being up in the USA, providers are finding it hard to
win back patients’ trust to come for clinic visits. In such a scenario, the provider organizations
must steer clear of any unwanted lawsuits to maintain stability.
This article will discuss the common and rare reasons for lawsuits related to improper billing in
healthcare and help you understand how you can identify red flags before they prove dangerous for
the organization.
Recent Instances of Skewed Billing in Healthcare
While studying the different healthcare lawsuits, you will find that all cases’ situations and
clinical setup are unique from each other. But as you go deeper into the details, it will all come
down to a single issue- wrongful billing.
Colonial Family Practice of South Florida paid $1.25 million as a settlement price to negate the
allegation that it had wrongfully performed medically unnecessary advanced tests and billed the
Government insurers for it. The clinic did not admit to any wrongdoing or fraudulent activity in
addition to this payment.
In March 2021, a home health agency in Massachusetts had to pay $10 million to settle claims of
wrongfully billing the state’s Medicaid program.
An alleged violation of the Anti-Kickback Statute and the False Claims Act caused a leading dialysis
company in Massachusetts to settle a whistleblower complaint earlier this year.
On the one hand, these settlements gravely affect the finances of the healthcare organizations,
making the existing condition much worse. On the other hand, the patients lose trust in these
organizations, affecting the loyal clientele of the hospital chains or independent clinics.
Patient’s Payment Responsibility on the Rise
Attention to detail is one of the essential skills that the hospital billing teams need to possess
to ensure no unintended billing mistakes. One minor clerical error on the part of the billing team
could cost the payers an incredible amount of trouble and financial burden.
When dealing with insurance panels, the companies go through the claims and communicate regarding
any coding issue or any other payment-related trouble.
On the other hand, patients receive the final bill with a substantial out-of-pocket expenditure with
minimal resources to go through every detail.
In recent years, the patient’s share of the medical bill has been on the rise. According to a
published report by Kaiser Family Foundation called Data Note: Americans’ Challenges with Health
Care Costs, 67% of Americans are worried about their unexpected medical bills.
The breakdown of the deductibles also shows that in 2018, 46% of the patients with a single coverage
employer health insurance had a deductible between $1000 and $2999.
In combination with the fact that 68% of patients could not fulfill their medical bill balances
according to a survey of TransUnion Healthcare, these statistics make it clear that room for any
mistake is absent now.
In such restricted financial conditions, one wrongful billing will mess up the patient’s accounts
and lead to strict allegations with multi-million dollar lawsuits.
Red Flags to watchout for Billing in Healthcare
Analysis of the billing lawsuits against healthcare organizations for fraudulent billing in
healthcare shows that the root causes have not changed much over the years. However, the settlement
prices have gone up significantly with each passing year, making it difficult for the organizations
to stay afloat during tough times. This clearly highlights the lack of organizational will to
address these issues with precise solutions. Here are some of the most common yet pressing issues.
Unbundling of codes:
Unethical usage of separate codes for linked procedures instead of the available single code
increases the claim amount and leads to inflation of profit for the organizations.
Upcoding:
One of the most common fraudulent practices, upcoding, can multiply the organization’s revenue by
replacing codes with procedures of higher complexity than was performed.
Undocumented use of Modifier-22:
Proper documents should accompany Modifier-22 as to why the procedures needed more work than usual.
Any such use of this modifier without valid reasons is a red flag.
Duplicate Billing:
Billing the patient more than once for the same procedures can inflate the numbers in the bill and
cause severe cases of wrongful billing in healthcare.
Intent or not, Eliminate errors
The most challenging part of handling legal allegations of improper billing in healthcare is that it
is immaterial whether you made a mistake intentionally or not. The laws like the False Claims Act
only highlight whether the wrongful billing or claim filing was done. When you have no intention of
committing any such fraudulent activity, it is difficult to cope with the fact that you are losing
out on millions of dollars over clerical errors. Sometimes the settlements might not work out, and
the legal battles may continue for a long time. So it is advisable that irrespective of any show of
intent, eliminate your errors as soon as possible.
Build a Frictionless Cycle of Billing in Healthcare
Significant yet straightforward steps can help you build a frictionless healthcare billing cycle.
Invest in automation technology. Make sure that the huge number of papers does not contain any
unnecessary manual mistakes.
Train your staff frequently to be aware of these issues and updated with what they can do to help.
Get in touch with a billing partner to smooth out any creases that you might still have in your
organization. Get in touch with a leading revenue cycle management company today.
We hope this article helped you understand the real cost of improper billing in healthcare and how
you can identify the red flags beforehand. For any queries, connect with us in the comment section
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