A good compliance program is good for business and keeps you safe from legal and reputational damage.
Billing errors or fraud can lead to serious legal and financial consequences. The federal False Claims Act (FCA) says that “filing false claims may result in fines of up to three times the programs’ loss plus $11,000 per claim.” Enforcing false claims is still a top priority. For example, in FY2024, the Justice Department recovered more than $1.67 billion in healthcare fraud cases. In June 2025, a nationwide takedown charged 324 people in schemes worth $14.6 billion. Because of this, healthcare providers need to be careful. As one U.S. Attorney said, “Any claim that a provider is billing for services not actually provided will be vigorously investigated.”
What Is Incorrect Billing?
Billing incorrectly includes a lot of abusive behaviors, whether they were done on purpose or by mistake. Some common examples are:
Upcoding
Overcharging for services or E/M codes. Hospitalist companies paid $4.38 million to settle allegations of upcoding E/M codes beyond doctors’ actual performance, which increases reimbursement. Understanding modifiers in medical billing is equally important, as incorrect modifier use can lead to denials, overpayments, or allegations of improper coding.
Unbundling (“Fragmentation”)
Breaking a multi-step process into smaller, billable steps. For example, charging for each lab test in a panel separately instead of using one panel code. This wrongly raises the...
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