Published 10/1/2018
Michael R. Marks, MD, MBA

Don't Be the Next Victim of Billing Fraud and Abuse

Every physician has scenarios they seek to avoid: bad nights on call, less than optimal outcomes, and the fear of malpractice suits. What many don’t think about are coding mistakes that could result in federal investigators knocking on the office door. Audits may uncover coding errors, resulting in stiff fines and even jail time.

Examples of Medicare fraud include:

  • knowingly submitting, or causing to be submitted, false claims or making misrepresentations of fact to obtain a federal healthcare payment for which no entitlement would otherwise exist
  • knowingly soliciting, receiving, offering, and/or paying remuneration to induce or reward referrals for items or services reimbursed by federal healthcare programs
  • making prohibited referrals for certain designated health services
  • Examples of Medicare abuse include:
  • billing for unnecessary medical services
  • charging excessively for services or supplies

Types of improper payments may include mistakes (errors), inefficiencies (waste), bending the rules (abuse), and intentional deception (fraud).

Some of the most commons pitfalls every physician needs to be aware of and avoid include:

Don’t unbundle codes

For most submitted codes, the Current Procedural Terminology (CPT) Editorial Panel has already decided the services that should be bundled with the main code. Continuously unbundling codes creates an audit target. For most procedures, imaging is included in the code; thus, it is inappropriate to submit fluoroscopy codes.

Know Medicare’s bundling rule

In 1991, AAOS worked to provide orthopaedists with information on services that typically would be bundled when it published Global Service Data (GSD). The American Medical Association, which publishes the CPT coding book, refers to the GSD as a source for understanding orthopaedic bundling. This information can be reviewed easily in Code-X, the AAOS electronic coding product. In 1996, the Centers for Medicare & Medicaid Services created the National Correct Coding Initiative (NCCI), which includes guidelines that reinforce CPT bundling rules. However, for many orthopaedic scenarios, NCCI edits and guidelines are more restrictive than GSD. This creates a great deal of angst for physicians, especially because some commercial carriers now follow NCCI edits. There are multiple electronic products available for NCCI edits.

Know how to use your modifiers appropriately

Inappropriate use of modifiers, or not using them at all, can result in submission of fraudulent bills (Table 1). Audits frequently discover inappropriate use of modifier 59, which has been considered “magical,” as it unlocks payment for codes that are usually bundled. Additionally, when using modifier 50, check that the code you are submitting is not already a bilateral code.


Upcoding can occur in two types of situations. The first is when a physician submits an evaluation and management (E/M) service that is higher than the service that is documented in the medical record or that is warranted by the medical necessity of the condition. It is important to remember that medical necessity determines the amount of documentation that is required in the record. We can always document a Level V visit for a simple ankle sprain; however, is that a medical necessity? In the second type of situation, the physician uses time as the criteria for most of the billed encounters, and when someone adds up all the time for the patients seen, it is obvious that there is no way the physician could have seen patients in the morning and spent the afternoon in the ambulatory surgery center.

Overusing modifier 22

This modifier should be used in cases of increased intensity, time, or technical difficulty of the procedure compared to the normal procedure. When submitting the bill, include proper documentation to explain why the procedure required more work than usual and the additional fee that is requested. This is a code whose frequency will depend upon a surgeon’s case mix. Be aware that high utilization of modifier 22 will raise suspicion for an audit. If you are a sports medicine surgeon, revision of anterior cruciate ligament (ACL) reconstruction (CPT 29888) would be an appropriate example of modifier 22 use, as there is no revision ACL code, and the work to perform this surgery has increased intensity. However, using modifier 22 for an obese patient undergoing a lumbar diskectomy (CPT 63030) is inappropriate. There is a bell curve of body habitus under the vignette for this code. A surgeon wouldn’t think of placing modifier 52 (reduced services) when the patient weighed only 100 pounds.

Improper use of modifier 25

Using this modifier raises a flag for scrutiny of your billing. Make sure there is sufficient E/M to warrant billing for that service. Most physicians are aware that patients receiving a series of hyaluronic acid injections should not be billed for E/M on subsequent visits following the initial injection. However, such billing errors still occur and are identified in audits.

Reporting unlisted codes without documentation

The vast majority of codes submitted will have a category 1 CPT to describe the procedure. However, there are still codes that do not currently exist. An example is core decompression for osteonecrosis of the femoral head. Don’t try to substitute an accepted code because you know that it will be easier to get paid. Submit codes that accurately describe the work you perform. With submission of an unlisted code, additional information should be submitted (usually electronically) to provide a comparison to an accepted code that is similar to the work performed, along with a request for a fee that is appropriate.

Every practice should invest in education for their physicians, advanced practice providers, coders, and billers. Such education can be obtained through one of the Academy’s coding courses or from another organization. Physicians joining a new practice should receive education within the first year.

You can avoid an investigation for fraud and abuse by proactively performing audits and obtaining education to fill gaps and improve compliance with the rules and regulations of coding.

Michael R. Marks, MD, MBA, is a member of the AAOS Medical Liability Committee and Patient Safety Committee, as well as cochair of the Communications Skills Mentoring Program. He is employed by Relievant Medsystems and Marks Healthcare Consulting.


  1. Centers for Medicare & Medicaid Services: Medicare Fraud & Abuse: Prevention, Detection, and Reporting. Available at: https://www.cms.gov/Outreach-and-Education/Medicare-Learning-Network-MLN/MLNProducts/downloads/Fraud_and_Abuse.pdf. Accessed August 20, 2018.