Whistleblowers Expose Upcoding Fraud

The government has a massive stake in healthcare. Programs like Medicare, Medicaid, and TRICARE provide care to millions. In 2021, for example, the Department of Justice recovered about $5.6 billion in settlements and judgments involving false claims and fraud. More than $5 billion of that total involved healthcare sector entities.

What are some common upcoding schemes?

Three of the most common examples of upcoding schemes are:

• Misrepresenting the licensure or credentials of the medical professional who provides treatment
• Misrepresenting the level of treatment provided
• “Unbundling”

Misrepresenting licensure or credentials

An unscrupulous medical practice may enter a physician’s NPI code as if the doctor has seen the patient, when in fact a nurse practitioner or physician assistant saw the patient without a physician, because insurers typically reimburse a physician encounter at a higher rate than an encounter with other medical staff.

When a procedure, diagnosis, or visit can be done by an NP or a PA, he or she is typically only allowed to bill Medicare at just 85% of the rate of a physician. In some circumstances, an NP or PA may bill a patient visit at the full physician’s rate; however, federal healthcare programs only allow this in very specific circumstances. For example, the physician must be physically present in the same suite for immediate consultation.

When the physician is not in such close proximity, billing at the full rate for services by a nurse practitioner or physician’s assistant is a type of upcoding that violates Medicare billing guidelines and the False Claims Act.

In a classic miscoding case, Bill Nettles and Fran Trapp helped win $22.5 million from South Carolina’s largest urgent care provider.⁴ The provider and its management company were alleged to have improperly billed Medicare, Medicaid, and TRICARE for services rendered by physicians without the proper billing credentials. The care provided in the case was not compromised – the company simply did not complete the required credential for some of its physicians and, rather than find a temporary solution, chose to bill uncredentialed physicians as credentialed.

Misrepresenting the level of treatment provided

Upcoding frequently involves the wrong CPT code. A simple example: A patient’s five-minute visit with a nurse practitioner or physician’s assistant with no other treatment, tests, or diagnoses should be coded as “99211”, according to AMA and Medicare/Medicaid guidelines. An established patient’s fifteen-minute visit with a physician is coded as “99212.” If a physician’s assistant sees a patient for five minutes without discussing the patient’s medical history, and the office manager sends the patient’s insurer a request for reimbursement with the code “99212,” then that is an example of upcoding and possible fraud.

But FCA cases often involve much more technical distinctions. In one case, a federal court held a diagnostic clinic liable in March 2020 for repeatedly upcoding a procedure used to diagnose glaucoma, a buildup of fluid in the eye that puts pressure on the optic nerve and causes temporary and sometimes permanent blindness.³

The clinic diagnosed glaucoma via “tonometry,” a procedure that measures the pressure of fluid in the eye, which carries the CPT code “92100.” But the clinic regularly billed Medicare for a more expensive procedure called “tonography,” CPT code “92120,” which measures the rate at which fluid leaves the eye when the eye is pressed. The distinction between the two can come down to where pressure is being measured and how, so it isn’t hard to see how medical professionals might disagree with one another.

But the whistleblower in that case, a doctor for the clinic, had shown its medical director formal opinions from the American Optometric Association and American Academy of Ophthalmology, which agreed that the clinic’s procedure qualified as the less-expensive tonometry, and yet the clinic persisted in billing for the more-expensive tonography.

“Unbundling”

Another common scheme for overcharging insurers is “unbundling.” Some procedures with multiple components are “bundled” together and assigned a single CPT code. The rates that Medicare and many private insurance companies have agreed to pay for that procedure are typically lower than the sum of the rates when the components are billed with separate CPT codes as multiple procedures.

Billing the insurer for the components as multiple procedures is known as “unbundling” and can be a violation of the FCA.

Do I need an attorney for reporting health insurance fraud?

You can report health insurance fraud on your own, but there are many reasons to engage an attorney. An experienced qui tam attorney can help try to persuade federal and/or state attorneys to bring in the government as an active party, which increases the lawsuit’s chance of success. Not only can we help you with your claim, we can work to try to ensure you receive the maximum possible protection from retaliation under the law.

An experienced qui tam attorney can also help you investigate the fraud so that an FCA lawsuit you file contains the right type of information and gives proper notice to the relevant government agency. These steps are crucial to ensuring that you are compensated for your efforts and the risk you take by speaking up, if the lawsuit is successful.

PRO TIP: Anyone can report fraud, but that may prevent you from pursuing a whistleblower case. You want a lawyer to effectively work your case, fight for your protection from retaliation, try to limit your legal liability, and eventually seek a maximum award if the case is successful.