Best Billing Practices to Avoid Legal Woes Under the FCA or State Fraud Statutes

Those in the healthcare industry face high levels of regulation, and there is associated regulatory compliance that is required. Compliance is not always straightforward. One area that receives extra scrutiny is billing practices. If a medical practice engages in improper billing, there can be significant legal penalties under the False Claims Act (FCA) or state fraud statutes. It is essential to adopt best practices for billing that ensure compliance with federal and state regulations. Here is a guide for the best billing practices to avoid problems with improper billing.

False Claims Act (FCA)

Under the FCA, any person who causes to submit or who knowingly submits false claims to the government is liable. They are liable for three times the government’s damages, as well as a penalty that is linked to inflation. In the fiscal year ending September 30, 2023, the Department of Justice obtained more than $2.68 billion in settlements and judgments from civil cases involving fraud and false claims against the government. Under the FCA, it is illegal for a healthcare provider to submit false or fraudulent claims to Medicare or Medicaid programs.

State Fraud Statutes

Additionally, states have their own fraud statutes. Two in Georgia are applicable. There is the Georgia False Medicaid Claims Act. Under this law, people who knowingly present false or fraudulent claims or deceptively conceal or avoid payments that relate to Georgia’s Medicaid program can be held liable. Additionally, Georgia has the Georgia Taxpayer Protection Act. Under this law, those who deceptively conceal or avoid payment obligations to the state, or knowingly present false or fraudulent claims for payment to the state, can be held liable. 

Common Billing Practices that Can Lead to Legal Issues

Many of us have read the headlines of medical practices knowingly engaging in fraud for financial gain. While there are billing practices that are intentionally deceptive, some providers are less aware of the impact of their billing practices. While you might claim that you did not “know” any better, it is best to avoid being in the situation in the first place. Here are some common scenarios in which medical practices get in trouble with the FCA or state fraud statutes:

Billing for services not rendered: Charging for services or procedures that were never performed

Duplicate billing: Charging for the same service more than once

Kickbacks: Offering or receiving compensation in exchange for patient referrals, which is also prohibited under the Anti-Kickback Statute 

Unbundling: Separating services that should be billed together to increase reimbursement

Upcoding: Billing for more expensive services than were actually provided

Best Billing Practices 

To avoid running afoul of the FCA or your state fraud statute, here are some best practices for your healthcare organization.

1. Document Everything, Accurately

Each billing entry should be supported by medical records that clearly indicate the services rendered, the necessity of those services, and the time spent providing them. Use the correct coding. Failing to properly document services can lead to an inaccurate claim submission, which can trigger liability under the FCA or state laws.

2. Audit Billing and Coding, Regularly

It is essential to conduct internal audits of your billing and coding practices. Regular audits can help identify mistakes before claims are submitted. This process involves reviewing billing claims for accuracy, ensuring that codes reflect the services provided, and verifying that documentation supports the billing codes.

These audits should be conducted periodically, and the results should be documented. If an audit uncovers errors or inconsistencies, they should be corrected immediately, and appropriate staff training should be implemented to prevent future errors.

3. Only Bill When It Is Medically Necessary

It is fraudulent to bill for services that are not medically necessary. To avoid this, providers must ensure that all services billed are justified and align with accepted medical standards. Claims submitted to Medicare or Medicaid must demonstrate that the services provided were essential to the patient’s care.

4. Do Not Upcode or Unbundle 

Upcoding is the practice of billing for a more expensive service than what was actually provided, while unbundling refers to billing separately for services that should be billed together as a package. Both practices are illegal and can lead to FCA violations. Billing staff must be trained to use the correct codes and should follow coding guidelines strictly.

5. Prevent Duplicate Billing

Duplicate billing, which occurs when the same service is billed more than once, can also lead to FCA violations. This can happen inadvertently due to human error, such as failing to coordinate between multiple departments or billing systems. Implementing systems to catch potential duplicate claims before they are submitted is essential. Technology such as billing software with built-in error detection can help prevent these mistakes. Automated alerts can notify billing staff if a service has already been billed, reducing the likelihood of submitting a duplicate claim.

6. Implement a Compliance Program

The top thing that you can do is to implement a compliance program. A compliance program should include the following elements:

Engage in internal monitoring and auditing. You must continuously review claims before submission and identify potential risks or errors.

Have a designated compliance officer. This individual should oversee all compliance activities and report directly to senior management.

Offer regular employee education. This should include ongoing training programs for all staff, particularly those involved in billing, coding, and documentation.

Write and regularly update policies and procedures. Clearly define the organization’s commitment to billing and coding compliance.

Speak to a Georgia Healthcare Lawyer Today 

To avoid legal issues under the FCA and state fraud statutes, healthcare organizations must adopt billing practices that prioritize compliance, accuracy, and transparency. By staying vigilant and proactive, healthcare providers can avoid the costly legal and financial repercussions of fraudulent billing. The best way to avoid future legal problems is to have the right practices in place. Healthcare lawyers who have helped clients navigate the legal repercussions of bad billing practices can help you put a plan in place to avoid being in a costly situation down the road.

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