Medical Billing Fraud vs Medical Billing Abuse

As a medical billing instructor I am frequently asked what is the difference between fraud and abuse in medical billing. This article will seek to differentiate and give examples regarding both.  Of course, Medical Billing Fraud vs Medical Billing Abuse, both fraud and abuse are to be avoided by the professional medical biller :).

Medical Billing Fraud vs Medical Billing Abuse

Medical billing fraud is an intentional deception that results in an unauthorized payment. Examples include the following:

  • Billing  for services not provided.
  • Up-coding which means a service was provided, but billed out at a higher level. An example might be the patient having the flu and the doctor billing for treating pneumonia.
  • Providing unnecessary services that the patient did not require and were not medically necessary.
  • Billing  for services that are not billable, and may be renamed so they can be billed. For example, a plastic surgery “nose job” which is not covered by insurance may be called a deviated septum, which is a billable procedure.
  • Unbundling  a service. For procedures which require a number of steps and can be billed at one amount, a provider may instead bill them individually so they add up to more reimbursement. If a code is a bundled code and all components are billed separately, then this is considered fraud.
  • Bill patients more than their co pays for services, which is referred to as “balance billing.”

Medical billing abuse is going against accepted business practices.  This can be unintentional and is why internal audits are so necessary.  Some examples of abuse are as follows:

  • Billing or claim processing errors.
  • Duplicate charging errors.
  • Overcharging for equipment or supplies used.
  • Submitting claims for services that were not medically necessary.

As a new medical biller it is important to pay attention to what you are doing at all times in order to avoid committing fraud or abuse. The outcomes of both can carry sanctions, monetary penalties, warnings, and recoupment of funds.


By: Dawn Moreno, PhD, CBCS, CMAA, MTC. Lives in the beautiful Southwest United States and has been an instructor for medical coding/billing for the past 7 years. Interested in quality medical billing training? Check out more details for Medical Billing

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