Data Miners Target Non-Compliant Medical Billing Coding

You may be confident that you have the best HIM solutions in place to minimize medical billing coding errors, but a smart algorithm could find otherwise. Third-party data miners are uncovering more suspicious billing coding activity.

Improved HIM systems and medical billing code audits are helping healthcare service providers find problems before third parties do.

Behind the Rise in False Claims Lawsuits 

With help from improved HIM systems, medical billing fraud costs are falling. The cost of improper payments to Medicare fell in 2019 to a 10-year low of $28.9 billion, or 7.25 percent of payments. Yet more healthcare service providers are being sued for billing coding fraud. Data analysis firms that digitally sniff out irregularities in healthcare billings are increasingly at the center of claims of Medicare upcoding and unbundling fraud. 

A recent typical billing code lawsuit involved a California healthcare services provider with a significantly higher number of secondary diagnoses than its diagnosis-related group (DRG). Physicians were enticed to increase billings with padded charges in exchange for client flow and other kickbacks. 

A Double-edged Court Ruling on Coding Fraud 

Whether or not you have poor HIM practices, you are at risk of being targeted for billing coding fraud by a data algorithm. A recent court ruling could provide healthcare service providers with a false sense of security. Like in the California case, a data analysis firm found a Texas hospital system had an unusually high number of secondary diagnoses. 

The Texas court of appeals dismissed the lawsuit. In summary, the appeals court considered the hospital system was within its legal rights to maximize its billings as long as it could provide the supporting documentation. And, significantly, data anomalies were found, but not fraudulent activity, noted the court.

The High Cost of Reputational Damage

The risk is the ruling could create a moral hazard if medical coding services let their health information management standards slip. Regardless of the court outcome, if billing coding anomalies are discovered, you could incur much higher expenses in reputational damage. 

The California health services provider is facing a very public $188 million lawsuit. Because the false claims case is being widely reported in the media, the healthcare provider risks losing both patients and doctors within its network.

By continuing to invest in improving health services billing coding practices, you can minimize legal and reputational risks. The lawsuits are a reflection of more active patient advocacy. The decade low in Medicare billing fraud reflects improvements in the Medicare Advantage Program. However, improper payments are increasing in Medicaid and the Children's Health Insurance Program. 

Having regular audits conducted of your HIM and coding system ensures you, not a data algorithm, catch any billing irregularities.

To learn more, reach out to a local medical coding service.

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