Fraud, Abuse, and Compliance
Understand the laws governing claim submission, the difference between an error and fraud, and what to do when you are asked to code something you cannot support.
By the end of this lesson you can
- Distinguish fraud from abuse from an honest error
- Describe the major laws governing healthcare claims
- Identify common fraudulent billing patterns
- Know how to respond when asked to submit something unsupportable
Lesson Notes
Read through the key concepts before you try the challenge.
Intent is what separates error from fraud
You code for a provider at Lakeside Medical Associates.
A provider asks you to change a 99213 to a 99215 on a note that plainly does not support it, saying the visit 'felt like a level five' and the practice is behind on revenue. Refusing is uncomfortable. Complying would make you a participant in submitting a false claim, and 'my supervisor told me to' has never been a defense.
Your task: Know the law well enough to recognize the line, and know the process for what to do when you are asked to cross it.
| Means | Example | |
|---|---|---|
| Error | An unintentional mistake | A transposed code digit; a modifier omitted in haste |
| Abuse | Practices inconsistent with sound billing that result in unnecessary cost, without proven intent to deceive | Systematically billing a higher level without deliberate falsification |
| Fraud | Knowing misrepresentation to obtain payment not entitled to | Billing for services never rendered; deliberately upcoding |
The distinction turns largely on knowledge and intent. Errors are expected and corrected. Fraud requires knowing that the claim misrepresents what happened — which is why a coder who understands the rules and submits anyway is in a very different position from one who made a mistake.
| Law | Prohibits | Note |
|---|---|---|
| False Claims Act | Knowingly submitting false claims to the government | Substantial per-claim penalties plus multiplied damages; includes whistleblower provisions |
| Anti-Kickback Statute | Paying or receiving anything of value for referrals of federally funded services | Criminal statute; intent-based |
| Stark Law | Physician referrals to entities they have a financial relationship with, for designated services | Strict liability — intent is not required |
| HIPAA | Improper use and disclosure of protected health information | Civil and, for knowing misuse, criminal penalties |
| Exclusion authority | Excluded individuals participating in federal programs | Exclusion effectively ends a healthcare career |
| Pattern | What it is |
|---|---|
| Upcoding | Reporting a higher-paying code than the documentation supports |
| Unbundling | Billing components separately when a comprehensive code exists |
| Billing for services not rendered | Claiming work that never happened |
| Misrepresenting the provider | Billing a mid-level provider's service under a physician's NPI improperly |
| Cloned documentation | Identical notes across encounters, suggesting they do not reflect real visits |
| Routine waiver of copays | Systematically not collecting patient responsibility |
When you are asked to code something unsupportable
Respond to a provider's request to change a 99213 to a 99215 on documentation that does not support it.
- 1
Assume good faith and treat it as a documentation question first.
Providers are often genuinely unaware of what the level requires, and the visit may well have involved work that was simply not written down. Framing it as 'the note does not currently support 99215 — was there more?' opens the legitimate route rather than starting a confrontation.
- 2
Offer the proper mechanism: amend the documentation.
If the work genuinely occurred, the provider may amend the note through the record's amendment process, with the amendment dated and attributed. A properly amended note supporting the higher level makes the higher code correct. This is the real solution, and it is available.
- 3
If the answer is that the work did not occur, decline clearly and without hostility.
'I can't code above what the documentation supports' is a complete answer. You are not accusing anyone; you are stating the rule you work by. Most requests end here.
- 4
If pressed, escalate through the compliance process rather than deciding alone.
Every practice should have a compliance officer or designated escalation route. Using it protects the practice, the provider, and you — and creates a record that you raised it, which matters a great deal if the pattern is later investigated.
- 5
Document what was asked and what you did.
A dated note of the request and your response is your protection. In a False Claims Act investigation, the question of who knew what becomes central, and contemporaneous records are worth far more than recollection.
Result: Either a properly amended note supporting the higher code, or the original code standing, with the exchange documented.
Treat it as a documentation question, offer the legitimate route, decline clearly if there is none, escalate rather than deciding alone, and write it down.
A provider directs you to bill a level of service the documentation does not support. You comply. What is your position?
Challenge
Apply what you've learned in this lesson.
Know the process before you need it.
- Research the seven elements of an effective compliance program as described by the OIG. Summarize each in one sentence.
- Find the OIG exclusion list (LEIE) and describe what it is used for and how often a practice should check it.
- Write out, word for word, what you would say to a provider asking you to code above the documentation. Keep it to three sentences and make it non-confrontational.
- Describe the escalation path you would follow if the request were repeated after you declined, and what you would document at each step.
Finished this lesson?
Progress is saved in this browser only. It is not a grade — official progress lives in Brightspace.