Insurance Overbilling Fraud
The act of over-billing insurance companies is when a medical professional tries to make more money than the services they are providing. There are several schemes that fall under insurance over-billing. If you are over-billing insurance companies, you may be charged under the Health Care Fraud Statute and the False Claims Act.
Healthcare providers that provide services to patients have to be careful when they submit claims because if they are over-billing their services, they may face civil and criminal penalties. The ways you can ovebill the insurance company could be through acts like charging for specific services or billing for services that were never rendered.
If you are suspected for over-billing insurance companies, you may face criminal liability so the best step would be to contact an attorney. A skilled attorney will be able to help assess your case and plan the best course of action. You might need to have private audits done of your practice or speak to different employees that you work with to get to the bottom of these charges.
Insurance over-billing could result in multiple fraud charges under federal statutes. The most prominent laws are the criminal health care fraud law 18 U.S. Code § 1347 and the False Claims Act. This law makes it illegal to defraud any insurance company either government or private intentionally.
Common Over-billing Schemes
- Upcoding, which is billing for a more expensive drug or procedure than what is given;
- Double billing, which is copying the charges for each patent;
- Unbundling, which is the act of billing for multiple smaller procedures encompassed in a larger procedure;
- Billing for services not performed, which is when some additional billed items or procedures never happened; or
- Unnecessary or excessive services, which is the act of performing services that may not be medically needed.
Under the criminal health care fraud statute you need to be acting in a way to defraud intentionally, that means any prosecutor would need to prove your intent. Without intent, you may not be held liable under this law
Charges Due to False Claims
When you submit a record to Medicare or Medicaid that overbills them, you may also get charged under the 18 U.S.C. § 287 the False Claims Acts. This act imposes criminal sanctions if you knowingly submit a false claim to Medicare or Medicaid.
The False Claims Act comes with a sentence of up to 5 years of imprisonment and a fine. To prove the False Claim, they need to prove you knowingly or with a complete disregard to what is going on were submitting false reports to Medicare and Medicaid. This means that if you are blatantly ignorant, you may be held liable under this law.
The civil penalty under the False Claims Act is $11,000 dollars for each false claim plus up to three times the damages to the government for the claim. The criminal liability under this law can be determined if someone knowingly makes a false claim, and criminal punishment is a fine up to $250,000 dollars and up to 5 years imprisonment.
Detection and Investigation
Instances of insurance over-billing are detected in various different ways including reporting by patients or investigations performed by a government agency. The Department of Justice (DOJ) has its own unit dedicated to finding instances of insurance over-billing.
The Health Care Fraud Unit is organized under the Criminal Division of the DOJ, and they are in charge of investigating instances of health care fraud cases throughout the United States.
How to detect if it’s a Fraud?
One of the largest ways that insurance over-billing is detected is through whistleblowers, which are private citizens who file a lawsuit against a medical professional or group for fraud related activities. If there is a successful conviction of fraud the whistleblower may get between 15-30% of all money recovered by the federal government in the lawsuit under the False Claims Act.
Other ways that government is tipped off include patient might report a case of health care fraud when they a are charged for services that they want to dispute. With deductibles on insurance plans, many patients will attempt and argue their bills which could tip off an investigation if there is a pattern of problems with billing.
Investigations into the practice of over-billing are extremely thorough for the most part. They usually involve investigation through questioning employees, looking through your medical records and contacting potential victims for interviewing.
How to know your rights?
During an investigation for over-billing it is important to know your rights such as the right to retain an attorney and that attorney may be present for all questioning. When the authorities questioned, you-you might refuse to answer any questions regarding the bills because you have the right to remain silent not to incriminate yourself.
An experienced attorney will work to assess the evidence and to help plan a strategy to deal with the investigators. If you are under investigation, it does not necessarily mean that you have done anything wrong or that you will get charged but having an attorney during an investigation may help you defeat the insurance over-billing charges.
If you are under investigation, it could also help to have an accurate accounting done of all of your past bills to help defend against these charges.
At the end of the investigation, the Attorney General’s Office will decide if they have enough evidence to bring fraud charges against you for over-billing. When you are charged, you may enter into a plea deal with the prosecutor, but it is important to first speak to an attorney before entering into such a deal.
A plea to the crime of health care fraud or false claims act for over-billing insurance companies may also lead to certain civil penalties as well. During the investigation process or after the arrest they may begin questioning you to try and elicit incriminating information.
During any questioning, you have the right, not to incriminate yourself and you have the right to have an attorney present for questioning. An attorney will be able to help you assert your rights and guide you through the process.
What is the step by step?
- Your case may begin with a lawsuit from a whistleblower that says you are over-billing. It is important to take all whistleblower cases seriously because they may end up with you being prosecuted criminally for violations of Health Care Fraud or criminally under the False Claims Act.
- After the charges are brought against you the next step is a grand jury hearing where there will be a determination if there is sufficient evidence to indict. Before a grand jury hearing, it is important to speak to an attorney to help you prepare for the hearing because there is a chance to get the charges dropped during the grand jury hearing.
- After the indictment, your attorney and the government may work towards a settlement on the case or move towards dismissal of the case. If there is no settlement or dismissal, your case will most likely end up in a trial.
- After the indictment, the government will prepare for trial by continuing to gather evidence and securing witnesses. At this point, your attorney should review all of the evidence and preparing the best defense for a trial.
For your criminal convictions under the Health Care Fraud and the False Claims Act, you will also have the right to have a jury trial before a jury of your peers. During the trial, your attorney may call witnesses and give evidence of previous bills to show that you were not over-billing.
- The charge of over-billing may not be proved beyond a reasonable doubt; however, if it is more likely than not, you still may face civil charges.
Importance of Defense
If you are convicted of the crime of Health Care Fraud or False Claims Act, you may face jail time and several monetary penalties. In addition to the criminal charges, you may also face civil charges which fines may be so severe that you and your company may not be able to pay for them.
If you are under investigation, it doesn’t mean you did anything wrong, but they may find evidence that they see that points towards over-billing. It is for this reason that it is so important to keep detailed records of all of your visits and to make sure all employees are properly trained on the billing software.
When there is a problem, an attorney can go through your records to try and remedy any problems and to point out if there was not a problem.
What are the best defenses?
When you are charged criminally under either one of these statutes one of the best defenses available could be that you did not act knowingly or without regards of the consequences. Sometimes certain acts may not have been performed by you, or there might have been miscommunication.
It is important to speak to your attorney about what you knew about the billing procedures and who handles all of your bills. A medical group may also have problems with over-billing, so it is important to understand what the implications are against you personally as opposed to the group as a whole.
For conviction of health care fraud, the prosecutor will need to show that you specifically were the one that committed the offense. If there were a case of health care fraud, a possible defense would be that you were not the one who committed the offense.
Recent Cases and Their Impact
The problem of overbilling insurance providers is an increasingly prevalent activity which also means that investigations into these activities have increased. The FBI and DOJ investigate cases of overbilling quite severely especially when Medicare and Medicaid are involved.
Some cases of over-billing.
- Whistleblowers are a huge part of reporting cases of overbilling. One whistleblower in California received a total of $17.2 million dollars for reporting an overbilling practice performed by Prime Health Care in California.
In August the DOJ reached a settlement with Prime Health Care, which is a collection of 14 hospitals for a settlement of $65 million. The fact that the whistleblower brought the case forward and saw it to completion means that they were rewarded with a percentage of the recovery.
With such high value-rewards, it is important to know that even loyal employees may whistleblow.
- You may also face some serious jail time for a fraudulent act of over-billing insurance companies. A medical billing company in Miami Florida was routinely over-billing insurance companies for work done by all of the clinic customers of the billing service.
The owner who was responsible for the scheme is now serving an 8-year sentence for his act of fraud and has to pay close to $4 million.
- In United States vs. Sanjar a court held that the knowledge element involved in health care fraud includes when a person closes their eyes to something that should have been obvious to them.
United States vs. Sanjar, 876 F.3d 725, 744 (5th Cir. 2017). This is an important case because it means that if you as a doctor should know that your practice is overbilling, you may be held criminally liable. While the standard is high for theoretically burying your head in the sand, it is important to know you should be diligent in reviewing billing practices.
It is important to understand what the practices you are performing and how to enter the records into a bill for insurance companies properly. You should practice routine auditing of your bills to make sure that they are in compliance. Talking to an experienced attorney may be able to help you determine if your practices are in compliance with the law.
The best way to avoid liability for insurance over-billing is to keep accurate and detailed records of all insurance based claims. You should also make sure to regularly observe others in your practice that handle the bills to make sure they are in compliance.
If there is any inaccurate information reported to an insurance company you should seek the help of an attorney to proactively address this situation before it becomes a problem. Errors in the medical insurance field may happen, but the best course of action is to have a good plan in place to address future problems and to address any past problems.
Call Us Now
If you are under investigation for insurance overbilling it is important to contact an attorney to try and get to the bottom of what is happening. Having an attorney that understands the intricacies of the law will help you plan the best course of action for you.
An attorney can help plan next steps and for them to be present during questioning to help you through the investigation process. The charge of insurance overbilling can be a very serious charge and having a criminal attorney that specializes in federal criminal health care law can make all the difference.