Top 5 Healthcare Fraud Schemes: Upcoding and Misbilling

Most outpatient healthcare services are billed to Medicare, Medicaid, and other payers on a “CMS-1500” form, using Current Procedural Terminology (CPT) codes to identify the services performed. CPT codes, and their definitions, are published by the American Medical Association (AMA). Misbilling of CPT codes is one of the most common forms of False Claims Act violations in the healthcare field.

The Court of Appeals for the Sixth Circuit described the importance of CPT codes in poetic terms: “The Rosetta Stone for the billing codes is found in an American Medical Association publication called ‘Physicians’ Current Procedural Terminology,’ or ‘CPT.’” See Ohio Hosp. Ass'n v. Shalala, 201 F.3d 418, 420 (6th Cir. 1999).

Using the wrong CPT code to overcharge Medicare, or using a CPT code to charge for a service never performed, "is a staple FCA violation." See United States ex rel. Emerson Park v. Legacy Heart Care, LLC, No. 3:16-CV-0803-S, 2019 WL 4450371, at *9 (N.D. Tex. Sept. 17, 2019).

The CMS-1500 form includes several explicit certifications by the provider, including that the claim submitted:  (1) is “true, accurate and complete”; (2) “complies with all applicable Medicare and/or Medicaid laws, regulations, and program instructions for payment…”; and (3) that the “services on this form were medically necessary and personally furnished by me…” As many courts have reiterated: “The submission of a claim on the HCFA 1500 form is a certification by the provider to the government of the correctness of the information submitted and, among other things, that the services were performed by the provider....’” United States v. Krizek, 859 F. Supp. 5, 7–8 (D.D.C. 1994) 

Use of the AMA’s CPT codes on the CMS-1500 to bill Medicare for radiologic and other diagnostic procedures has been mandated by Federal Regulation since at least 2002. See 45 C.F.R. § 162.1002; see also U.S. ex rel. Stewart v. Louisiana Clinic, No. CIV.A. 99-1767, 2003 WL 21283944, at *3 (E.D. La. June 4, 2003).

Misuse of the AMA's CPT codes is one of the most common sources of fraud in the healthcare industry, and has led to many successful False Claims Act cases. Typically, whistleblowers in misbilling cases are healthcare workers, billing department employees, or patients who have received EOB's that show charges for services they never received. For more information, or to discuss a potential case, please contact one of the attorneys on our False Claims Act team.


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