Overbilling in Healthcare ? A Recent Threat

Posted by Ecareindia on October 31st, 2014

Overbilling is one of the rising threats that have become more common in the US healthcare industry these days. Sending out inflated medical bills to Payers and charging for healthcare services that were not rendered to patients are considered overbilling. A few Healthcare Providers involve in a broad spectrum of fraudulent activities, including duplicate billing and up-coding, to double their reimbursements. Let us take a detailed look at the causes, consequences and solutions of overbilling in healthcare:


If we analyze closely, the introduction of healthcare reforms like HHS sequestration cuts, the impending SGR payment cut, and software & technology upgrade costs due to ICD-10 medical coding implementation may have also been a reason for the increase in overbilling lately. Providers and medical claims processing companies would have assumed that they could cover part of their losses incurred by the new reforms through overbilling. Instead of taking such a route, one option is to save money by getting medical billing solutions from offshore medical billing companies.

Common Overbilling Activities:

· Up-coding: Providing a healthcare service, but billing for a higher level of that same service is called up-coding. For instance, a patient might have gone in for a regular health checkup amounting to only $60; however, the Provider might have billed for an extended health checkup that amounts to $100.

· Double Billing: Also known as duplicate billing; this activity happens when a Provider attempts to bill a service more than once. For instance, a Provider might charge for a Patient’s ICU while charging for the ventilator separately which is bundled under the ICU billing. In some cases, two Providers might get reimbursed for the services offered to the same patient on the same date and time, and this was not clearly indicated through the use of a Modifier.

· Unbundling: In order to get a higher reimbursement, Providers attempt to submit multiple bills using two or more CPT codes for the same set of services and tests provided to a patient, instead of submitting a single bill.

· Over Utilization of Services: This type of overbilling is common with physical therapists. They ask their patients to come for more than 5 sittings to treat a minor physical injury or problem.


· If such fraudulent activities take place more often, then the healthcare industry might face a huge revenue loss.

· It has been estimated that the medical billing fraud accounts for over $270 billion a year in losses approximately.

· RACs, MPICs and ZPICs have found billions in overbilled revenue and have recovered it for the Federal payers.

· It is feared that with the implementation of ICD-10 medical coding system, such fraudulent activities might get worse due to the increase in the number of codes from 17,000 to 60,000.

With an offshore medical billing company, US healthcare entities may get good medical billing solutions and keep their medical claims processing services free of overbilling and fraudulent activities.

About e-care India:

e-care India has 14 years of experience in the industry. e-care’s 3 offshore medical billing delivery centers have been providing end-to-end medical billing solutions seamlessly to its clients. To know more about e-care and its services, log on to www.ecareindia.com.

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Joined: June 20th, 2011
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