Healthcare Revenue Cycle Management, ICD-10, Claims Reimbursement, Medicare, Medicaid


Medical Billing Company Pays $1.95M in Fraud Settlement

By Ryan Mcaskill

- National medical billing company Medical Business Service (MBS) reached a settlement this week with the United States Attorney’s Office over allegations of defrauding the Medicare and Medicaid systems. The company has agreed to pay $1.95 million to rectify violations of the False Claims Act by fraudulently changing diagnosis codes on claims in order to get rejected claims paid on behalf of radiologists.

“Billing companies provide a key check-point to combat medical billing fraud. Consequently, they will be examined with the same scrutiny as health care providers,” United States Attorney Sally Quillian Yates said in a new release.

Derrick Jackson, Special Agent in Charge of the U.S. Department of Health and Human Services Office of Inspector General, added that every health care provider who contracted with MBS had trust that claims were properly processed.

“The lack of compliance and oversight by MBS placed all these providers at risk,” Jackson said. “Billing services such as MBS have no less of a duty to ensure truthful information on claims than do the providers who use these services.”

The United States alleges that over a three-year period from 2008 through 2010, MBS improperly coded and billed claims by radiologists that were submitted to the Medicare and Medicaid programs. There are guidelines that state the programs will not pay for certain procedures given to patients with specific diagnoses. Medicare and Medicaid rejected claims for payments that combine those procedures and diagnoses. This is where the fraud came in as MBS allegedly changed diagnosis codes on previously rejected claims to avoid these restrictions in a ploy to have the claims paid.

According to J. Britt Johnson, Special Agent in Charge at the FBI Atlanta Field Office, the federal funds that are designated for use through the Medicare and Medicaid programs are limited but in high demand. People suffer and the system fails when those funds are not used as intended. He added that the FBI will continue to work with a number of different law enforcement partners to target investigative resources toward ensuring these federally funded health care based programs are not abused.

This lawsuit also ends a whistleblower lawsuit. A majority of the settlement will go to the federal government. Florida, Georgia, New York,Texas and Katlisa Vaughn, the whistleblower, will split the rest.

This is the result of a focused government effort to combat health care fraud under the Health Care fraud Prevention and Enforcement Action Team (HEAT) initiative. HEAT was created in May 2009 by Attorney General Eric Holder and Kathleen Sebelius, Secretary of the Department of Health and Human Services. The focus of the group is on efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation. The False Claims Act is one of the more powerful tools to combat fraud and has helped the Justice Department recover more than $14 billion since January 2009.


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