When working in the healthcare industry, it is essential to protect your practice not only from patients who are planning to defraud your business or their insurance, as well as unwittingly committing healthcare fraud yourself. Healthcare fraud can be a very complex web of topics with several potential violations, so it is important to at least understand the basics of what not to do when treating patients. It’s important to note that not all healthcare fraud is done through malicious intent or intentionally trying to defraud insurance companies, and sometimes even the most well-intentioned solutions could potentially fall under healthcare fraud.

Actions That Are Considered Healthcare Fraud

While there are a plethora of specific circumstances that fall under healthcare fraud, they generally fall into a few particular categories. These aren’t all-inclusive, and there may be other situations outside of these that could be considered healthcare fraud, but the basic types of healthcare fraud and abuse are:

Billing Services Not Rendered

This covers fraudulent practices in billing patients or insurance companies for services that were never rendered. This is usually done either by using accurate patient information for a patient that was never treated, usually obtained through identity theft, or it can be used to pay a claim by adding additional testing and procedures that were never done. This is one of the most apparent cases of things that fall under healthcare fraud, as you’re billing for work never performed. It’s like skipping out on a work shift but still requesting payment from your employer. Despite how wrong this practice is, though, it can be easy to accidentally bill for services never rendered if your filing and the organizational system is lacking. For example, if you have a Michael Mitchell and a Matthew Mitchell both at your practice, poorly set up filing systems that list them both as simply M. Mitchell could lead to procedures performed on Michael being billed to Matthew’s insurance.


Upcoding is primarily billing for more expensive treatments than were performed. This is usually snuck under the radar by also inflating the patient’s diagnosis to something more severe, which would then reflect that the upcoded treatment was justified when viewed by insurance. There are a few ways things can be upcoded. One way is to list an acute condition as chronic, which would then justify more advanced and long term treatment. Another way a procedure can be upcoded is by altering the measurements of the treatment. For example, removing a 1cm diameter skin legion and listing it as 2.5cm in diameter would be upcoding. While many upcoding issues are completely intentional, a lack of attention to detail can also lead to accidental upcoding. Incorrect record-keeping or illegible records that can easily be misread by clerical staff can lead to unintentional instances of upcoding, for example, forgetting a decimal place in measurement or writing a 0 in a way that could be mistaken for a 6.

Unnecessary Procedures

This one is pretty hard to do by accident, though still possible if your records and patient verification process is subpar, or if your staff is not up to date on the most current standards of care. This type of healthcare fraud is similar to billing for services not rendered, but this is when the services are rendered but are completely unnecessary. This would cover things to a lesser extent like duplicate tests In a short frame of time or in more extreme circumstances surgeries and extensive radiation treatments for localized cancers where a short term localized care process would be more effective. While both of these examples you may be able to justify to avoid legal issues, performing completely unnecessary procedures like knee replacements on someone with mild arthritis or some other wildly extreme example would likely land you in pretty serious trouble. Much like the ‘Mitchell’ example above, poor patient verification and filing systems could lead to procedures for one patient being performed on another, which would not only lead to potential healthcare fraud issues for unnecessary procedures but also a hefty malpractice suit on top of it.

Misrepresenting Non-Covered Treatment

This particular form of fraud is commonly seen in cosmetic surgery scams. This happens when a specific type of procedure that isn’t covered by insurance is listed as a procedure done in the same area which would be covered. For example, this would include things like listing a nose job as a septum repair for billing purposes. This kind of healthcare fraud is not something that is done by accident and is usually intentional.

Falsifying a Diagnosis

This is usually done in conjunction with billing for unnecessary procedures. This is when a doctor makes a false diagnosis to justify the either unnecessary or more expensive treatment of a patient for a bigger payout.


This kind of healthcare fraud usually occurs when multi-stage treatment is involved. Unbinding is the billing of several parts of a single procedure as multiple treatments or individual procedures.

Overcharging Patients

This one is surprisingly common, as many patients don’t know the details of their policy or even their copay before going for treatment, and trust the doctor’s office to charge them properly. There have been many cases where medical providers have either charged patients out of pocket for more than their copay or charged a copay for procedures that were fully covered by insurance. This one is something that is, again, hard to do by accident.

Waiving of Copays

While you may think you’re being altruistic and helping a patient out by waiving their copay if they can’t cover it, overbilling the insurance company to comp your loss is even worse. Both of these actions would constitute healthcare fraud. Many providers who take this approach also end up adding a ton of other falsified procedures or treatments to double down on their gains, as patients likely won’t look too much deeper into things than their own out of pocket expense, which was zero.

Misrepresenting Provider of Service

It’s a scary thought that the person providing you treatment might be less qualified than you are let on to believe, or might not even be licensed at all. Some medical facilities will have lesser qualified personnel like social workers or clinical staff administer treatments and therapy sessions, and have the lead therapists sign off on them. While insurance companies will pay for less qualified individuals like social workers and counselors to provide your treatment so long as they are licensed, the insurance companies will pay less for you to do so. In some instances, some of the individuals providing the counseling aren’t even licensed, which is a big problem.


The potential for corruption is rampant in the medical industry. With the potential for illegally receiving kickback or compensation for referrals, this can lead to patients being referred to specialists for completely unnecessary treatments. Proving bribery usually requires establishing a “quid pro quo” relationship, though regardless of how well hidden the transactions are, they typically come to light when under thorough investigation.

How Can I Prevent Healthcare Fraud

With so many different ways a provider can commit fraud, it is vital to do everything in your power to assure your practice doesn’t slip up, either accidentally or intentionally, and do anything it shouldn’t. With so many things to keep track of, though, it can be challenging to know where exactly to start. There are a few important things you have to do as a medical provider to ensure that you don’t accidentally commit healthcare fraud:

Understand Healthcare Laws and Regulations

With each false claim netting fines up to three times the cost of disbursement as well as $11,000 on top of it, it is crucial to ensure both yourself and your staff are well versed in the laws and regulations involved with submitting claims. The False Claims Act (FCA) also provides a portion of the recovered money from fines as a reward to incentivize the reporting of any false claims, be it by employees, competitors, or even patients.

Accurate Billing

Making sure your billing system is accurate, and the correct amounts are being billed to the correct insurance companies can help prevent you from accidentally committing insurance fraud. Billing services rendered to one patient under another patient’s insurance company, or billing for services that were ultimately canceled or undelivered would constitute as healthcare fraud, and while not intentional, could land your practice with some hefty fines.

Keep Documentation Up To Date

Keeping detailed and up to date records of your patient’s treatment serves a variety of purposes. First off, it ensures that treatment progresses in the best possible fashion, avoiding the administration of unnecessary treatment. Having detailed records of treatment also helps protect you from malpractice lawsuits. Lastly, as far as the Centers for Medicare and Medical Service is concerned, if the treatment is not documented, the treatment did not take place, simple as that. Keeping up to date records and documentation of treatment can help keep you out of trouble on multiple fronts.

Avoid Unnecessary Referrals

While partnering with other medical practices isn’t inherently wrong or illegal, it can lead to conflicts of interest and an ethical dilemma. When partnering with another practice, consider the value of the buy-in offer. If it seems severely underpriced, they may be expecting a large number of referrals from the partnership in return.

Maintain Transparency

While transparency with your patients is undoubtedly important, maintaining transparency in regards to your industry suppliers is also extremely important. While accepting gifts from industry suppliers isn’t inherently illegal, some laws require all gifts to be recorded and accounted for, as gifts can affect the actions of medical care providers in regards to industry standards and their choices on suppliers. If you’re on the fence about keeping out of trouble, it is sometimes easier to deny any offered gifts to be on the safe side.

Disclose Conflicts of Interest

When running any business, conflicts of interest are an inevitability. These conflicts of interest are usually what leads to the slippery slope towards fraud and illegal activity. State agencies, the FDA, and other regulatory organizations have clear outlines on reporting any conflict of interest and how it should be reported. Keeping this level of transparency will help keep your business out of trouble, as these conflicts can’t be dredged up to be used as evidence against you later if they were adequately disclosed.

Create a Compliance Plan

Creating a compliance plan is the best way to keep your practice out of legal trouble, and is required for your practice to be Medicare and Medicaid eligible. Usually, compliance plans consist of the following:

-An appropriate violation detection response or plan of response should a violation be uncovered.

-Compliance and practice standards which, if followed, ensure all of your staff are doing things properly.

-Election of a compliance officer who will enforce the compliance regulations and ensure they are being maintained.

-Ongoing training and education about compliance practices usually included with the onboarding of all new staff, as well as regular retraining sessions for existing personnel.

-Internal monitoring and auditing systems to ensure everything is running according to compliance.

-Clear and organized communication about compliance procedures and status to ensure all employees are on the same page.

-Well-publicized disciplinary guidelines to make the consequences of breaking compliance a clear deterrent.


Seek Legal Counsel

There are a few reasons a care provider should seek legal counsel. Any provider entering a partnership or business arrangement with a provider who is looking to limit referrals to certain key practices, or has any other business practices that may raise any red flags with the regulatory agencies should seek legal counsel before moving further. Providers who believe they may have filed false claims, or suspects illegal activity by their employees which may result in healthcare fraud should stop the billing of any false claims, limit the activity of any suspected employees and seek out legal counsel immediately in order to assess the potential damage and mitigate any fallout that may come from these actions. Healthcare law providers can also provide detailed risk assessments and plans for strengthening compliance and regulatory practices.


Lastly, if you are already under investigation, you should seek a healthcare lawyer immediately to help not only correctly prepare any necessary records and information required in the investigation, but also help provide a defense. If you are in need of a healthcare lawyer to help in dealing with a fraud investigation, contact our lawyers at Bell P.C, the Healthcare Fraud Group. Our network of highly skilled attorneys will collaboratively work to help navigate the investigation process as well as defend your practice to the best of their ability. Our team is made up of highly skilled attorneys, including former federal prosecutors, former District Attorneys and ADA’s, as well as former Department of Justice (DOJ) trial lawyers who have extensive experience in their fields. In addition to seasoned veterans in the field, we have amassed a substantial track record of success, including victories such as:

-Served as lead counsel for the pharmaceutical company against TWINMED during arbitration in a $10 million defense case. Won case for the defendant.

-Served as lead trial counsel for the medical center. Obtained a substantial jury verdict plus prevailing party attorney’s fees against Hospital.

$50 million settlement for Client arising from a confidential dispute.

-Successfully served as lead counsel in the Qui Tam healthcare lawsuit. Obtained dismissal for Clients.

-Successfully defended company in Fraud Investigation by the U.S. Attorney’s Office and the Federal Bureau of Investigation (FBI). Case resulted in no civil and no criminal liability.


If you need a healthcare defense team to help protect your medical practice or are merely looking for more information on how to best ‘fraud-proof’ your establishment, don’t hesitate to reach out for more details. Our team of seasoned attorneys will be glad to answer any questions you might have and assist in any way they can.