Fighting Fraudulent Claim Submission

By Aimee Wilcox, MA, CST, CCS-P

Although many citizens, government representatives and healthcare organizations are still working to repeal The Affordable Healthcare Act, the ball has been put into motion and anticipation of the influx of patients into the healthcare system appears inevitable. With more patients receiving care through federal programs there will also be an increase in the submission and payment of fraudulent medical claims.

Unfortunately, just as the unruly student who can't seem to control himself in class pushes a teacher to hand out extra homework or restrict recess; filing fraudulent claims causes an increase in the scrutiny of insurers and a significant cost increase to providers to prove the services provided to patients are real and justified.

It is estimated that Medicare and Medicaid pay an average of $750 billion dollars to medical providers annually and that of that money about $65 billion are paid on fraudulent claims.

As such, through the Affordable Healthcare Act, more money has been designated for fighting fraud through the use of computer programs that can more easily identify potential fraudulent claims and ever increasing RAC audits.

Computers Used to Fight Medical Claim Fraud

Computer programs can alert Medicare and Medicaid to issues such as a claims being submitted services rendered to patients who are deceased, services related to females being performed on a male or vice verse, and even services that would not make sense based on the patient's age and medical or surgical history.

Additionally, rumor has it that Medicare and Medicaid are incorporating programming that will recognize services provided to a patient on the same day in different states, somewhat like credit card companies are able to do to determine potential credit card fraud and send up alerts.

RAC (Recovery Audit Contractor)

RAC (Recovery Audit Contractor) audits are on the rise, increasing provider and facility costs associated with defending the services provided to patients and appealing the demands for the monies paid to providers.

It has been noted that many providers simply do not have the manpower or the trained staff to properly review RAC audits and determine if the demand for a refund deserves an appeal. The process can be painstaking and intimidating. There are deadlines to be met and documentation to be meticulously maintained.

Many providers are beginning to discover that although your appeal may be justified and the documentation may prove the service was warranted and payment justified, your first two RAC appeals may still be denied. This is where many providers give up and simply walk away from the fight. Although they may fight the first appeal denial, they tend to throw their hands up and not fight the second appeal denial. What they do not know or understand, is that many times these first two appeals are denied without so much as a review of the actual appeal. Once you have persisted to the third appeal level, real progress can be made. This is the appeal level in which a judge will hear your case and review your documentation.

It has been noted that out of the many RAC audits performed only 40% are ever appealed. However, of those appeals made and taken to the third level, about 75% are actually overturned.

Be Prepared to Address RAC Audits

What does this tell you? Do not be intimidated by a RAC audit. Do your homework, verify the services rendered were justified and that the claim was submitted in an accurate manner. Then, start the appeal process and stick with it until a judgment is made. This will take man power, training, and superior organizational skills but you are protecting the reputation of your providers and coders as well as their revenues.

Any way you look at it, fraud is high on the list of administrative priorities, both for the healthcare provider and the government. As we move into the future, we are sure to see the federal government implement more rigorous and creative ways to identify fraud and retrieve any ill-gotten monies. Unfortunately, just like those obedient and quiet students who were still punished for the unruly behavior of the one, the overwhelming majority of providers who do not bill fraudulently and who are making wise choices for their patients will still find the RAC audits appearing in their mailboxes. This process is time consuming and costly but if organized properly and managed well, you can protect the reputation of your honest, hardworking providers and the money they have earned by being prepared to fight for correct coding and proper medical decisions.

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Aimee Wilcox, MA, CST, CCS-P is a Certified Coding Guru (CCG) for Find-A-Code. For more information about ICD-10-CM, ICD-10-PCS, and medical coding and billing please visit where you will find the ICD-10 code sets and the current ICD-9-CM, CPT, and HCPCS code sets plus a wealth of additional information related to medical billing and coding.

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