As you are likely aware, Medicaid and Medicare are federal programs offering health care coverage based on age or financial need. If a healthcare facility is treating a patient with coverage under one or both of these programs, it must submit an invoice for services, which is later reimbursed. During this process, the facility creates a bill using a series of codes which correspond to the particular service or product used by the patient. Under federal laws, the codes must correspond with the precise form of treatment offered, and facilities are prohibited from entering any code for reimbursement that does not accurately represent the service offered by the facility.
Violations of this requirement are punishable under many statutes, including the False Claims Act. One way this requirement is violated is by “upcoding.” The term “upcoding” refers to the practice of billing a healthcare entity for a more costly service than the patient actually received, resulting in an inflated reimbursement amount and fraudulent profits for the healthcare facility. Any healthcare facility found to be engaging in the practice known as “upcoding” could face significant liability, including triple damages, suspension from the Medicare or Medicaid programs, and potential criminal sanctions.
United States v. IPC The Hospitalist Company
In a recent case involving allegations of unlawful upcoding, the United States opted to intervene against the California-based hospitalist company IPC. The complaint, filed by a former IPC physician, Dr. Bijan Oughatiyan , alleged that IPC doctors invoiced Medicare and Medicaid for levels of medical service that were either never rendered or were rendered in a different, less expensive, procedure. The complaint continued by alleging that IPC instructed its doctors to bill for services at the highest possible levels and even trained doctors on how to upcode. Doctors were allegedly routinely monitored and encouraged to “code higher” if their numbers lagged behind those of their peers.
Under the FCA, once an individual files a whistleblower lawsuit individually, the United States has an opportunity to join the suit, also known as intervening. When this happens, the government is able to use its investigative resources to dig deeper into the allegations, uncovering greater widespread fraud. Earlier this week, the U.S. decided to join the case against IPC and commented that the Department of Justice “continue[s] to be vigilant in our enforcement efforts to ensure that health care programs funded by the taxpayers pay only for appropriate costs.”
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