Detroit, MI – In medical environments, billing accuracy is paramount—not only for ethical and financial reasons but also for legal compliance. When medical billing does not accurately reflect the services provided, responsibility can fall on multiple parties, including medical billers, healthcare providers, and even facility administrators. However, the legal implications can be severe, particularly under federal laws that govern healthcare fraud and abuse.
- Legal Implications of Incorrect Billing
Under 18 U.S. Code § 1347, healthcare fraud is a federal offense. This law states that anyone who knowingly and willfully executes, or attempts to execute, a scheme to defraud any healthcare benefit program or obtain payment by means of false representations can face criminal prosecution. Penalties include hefty fines and imprisonment of up to 10 years per offense, and if bodily injury results from the fraud, the sentence can extend to 20 years.
Additionally, the False Claims Act (31 U.S.C. §§ 3729-3733)imposes liability on individuals and organizations that knowingly submit false or fraudulent claims for payment to Medicare, Medicaid, or other federally funded programs. The act allows for treble damages (triple the actual damages incurred by the government) and civil penalties per false claim submitted.
The Centers for Medicare & Medicaid Services (CMS) and the Office of Inspector General (OIG) oversee the investigation of fraudulent billing. The Health Care Fraud and Abuse Control Program (HCFAC), established under the Health Insurance Portability and Accountability Act (HIPAA) of 1996, coordinates with the Department of Justice (DOJ) and the FBI to identify fraudulent claims and enforce compliance.
2. The Role of Medical Billers in Ensuring Billing Integrity
Medical billers play a critical role in ensuring that every charge submitted aligns with documented services. The golden rule of billing is: if it is not documented, it did not happen. Every claim must be substantiated with appropriate documentation, including Progress Notes, Treatment Notes, and Physician Orders. These records should clearly outline what was provided, when, and by whom.
If a medical biller submits a claim without verifying the underlying documentation, they can be held liable, even if they were unaware of the inaccuracy. Claiming ignorance does not absolve them from prosecution. The OIG Compliance Program Guidance for Third-Party Medical Billing Companies explicitly states that billing personnel must have systems in place to confirm claim accuracy before submission.
3. Avoiding Legal Pitfalls in Medical Billing
To protect themselves and their employers from legal consequences, medical billers must:
- Verify Documentation – Ensure that every service billed matches what is documented in clinical records.
- Refuse to Bill Unsubstantiated Claims – Never submit claims based on assumptions or employer pressure if the documentation does not support them.
- Report Discrepancies – If discrepancies are found, they must be reported to supervisors, compliance officers, or legal counsel.
- Stay Informed – Continuous education on billing regulations, coding updates, and compliance protocols is essential.
Summation and Conclusion…
The accuracy of medical billing is not just a financial issue, it is a legal and ethical obligation. The False Claims Act and 18 U.S.C. § 1347 make it clear that fraudulent or inaccurate billing carries serious consequences. Medical billers must ensure that all billed services are properly documented, and simply stating they are unsure of the accuracy will not protect them from liability. Ultimately, billing integrity is a shared responsibility, but those directly involved in submitting claims bear the highest risk and must operate with diligence and adherence to federal law.
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Another Blog Post by Direct Care Training & Resource Center, Inc. Photos used are designed to complement the written content. They do not imply a relationship with or endorsement by any individual nor entity and may belong to their respective copyright holders.
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