Each year, fraud and abuse cost the Medicare and Medicaid programs billions of dollars. What is the difference between fraud and abuse? The Centers for Medicare & Medicaid Services define fraud and abuse as two different offenses:
- Fraud is an intentional deception or misrepresentation of services that an individual knows to be false and could result in an unauthorized reimbursement to a practice.
- Abuse describes incidents or practices inconsistent with accepted and sound medical, business, or fiscal practices.
The difference between fraud and abuse boils down to the person’s intent. Both activities have the same effect: they consume valuable resources from the Medicare Trust Fund, which would otherwise be used to provide care to Medicare beneficiaries. It is the intent that creates a fraudulent situation.
When fraud has been committed, the government can seek federal criminal conviction, take administrative actions to exclude the responsible parties from the Medicare program, or suspend the provider from the Medicare program altogether. In addition, monetary penalties may be imposed at the discretion of the Department of Health and Human Services (HHS) secretary. Violations could cost a health professional up to $10,000 per claim.
Abuse is considered a lesser offense, happening when practices do not follow proper coding and billing guidelines. When abuse is committed, the government usually recovers payments made in error and sometimes suspends the abusive provider from the Medicare program. In addition, civil monetary penalties can be imposed.
For example, fraud is:
- A physician soliciting new patients by offering waived co-payments;
- Billing for services not furnished (e.g., bill services for a “no show”); and
- Falsifying medical necessity for a procedure or altering medical records to justify payments.
Abuse is:
- Questionable billing patterns and practices, which may result in unnecessary reimbursement from the carrier;
- Overuse of medical and healthcare services (e.g., scheduling patients for multiple visits to receive higher reimbursement); and
- Billing services at different rates to different carriers.
Understanding the difference between fraud and abuse is just half the battle. Rheumatology practices should perform regular self-audits and review practice policies to verify that proper billing and coding guidelines are being exercised.
For more information about fraud and abuse, contact Melesia Tillman, CPC, CCP, in the ACR practice advocacy department at (404) 633-3777 or [email protected]
