Certification is Key to Preventing Coding Error and Fraud

Medical providers need qualified, professional medical coders to ensure all their claims are properly submitted and processed, as incorrectly coded information can lead not just to missed revenue, but also to potential fines and penalties. Health care providers seeking to protect themselves from the problems bad coding can cause should see to obtaining medical coding certification for their coders. Coders will also benefit from this training as they can be held responsible for non-compliance with rules involving medical coding.

Medical Coding Professional

Medical coding certification helps to protect medical coders and health care providers in a number of ways. Certification ensures that coders are trained to a high level. This experience gives them the expertise to accurately code claims, ensuring that insurers and payers are not over- or under-billed for services. Certification also discourages fraud, as it reinforces high standards of professional conduct.

The medical coding industry is currently in the midst of a transition from one set of coding standards to another. The old ICD-9 codes are being phased out in favor of the new ICD-10 codes. This is the first coding update in decades, and the new codes are much more detailed than the previous set. Professionals new to the coding field and established coders need to master the new codes to avoid making coding mistakes.

Consequences of Improper Coding

Improper coding and fraudulent medical billing can have huge implications for medical service providers and coders alike. The federal government, one of the largest payers of medical claims, is taking increasing action to crack down on fraud and waste, and is examining coding work much more stringently than in years past. Private insurers are also more stringently looking at medical claims, searching for mistakes that can result in them rejecting claims, as well as instances of abuse and fraud. According to the American Medical Association, in 2013 insurers rejected up to five percent of all claims.

Writing Down Codes

With regard to penalties for fraudulent coding, the federal government is empowered to levy some harsh fines if it discovers deceptive claims. The Federal False Claims Act and the Health Insurance Portability and Accountability Act (HIPAA) both have sections that provide mechanisms for punishing fraudulent medical claims submitted to the government.

HIPAA allows the government to impose criminal penalties on healthcare professionals who “knowingly and willingly” attempt to defraud healthcare benefit programs. Under HIPAA, violators can be sentenced up to 10 years of imprisonment if convicted of fraud. Should fraud result in serious injury to a patient, the sentence can be up to 20 years in prison.

The Federal False Claims Act also establishes hefty fines for fraudulent billing. Under the FCA, civil penalties for violation of the act can include fines of between $5,500 and $11,000 per false claim. In 2014, the U.S. Department of Justice recovered more than $5.6 billion in settlements and judgements related to violations of the act. That is $1.8 billion more than it recovered in the previous year, and the first time FCA recoveries have topped $5 billion.

As an example of how damaging fraudulent billing can be to an organization, consider this case: In 2015 Adventist Health System agreed to pay more than $118 million to settle a variety of claims against it by the federal government, including claims that it submitted false and fraudulent claims to obtain millions of dollars from Medicare and Medicaid.

Smiling Doctor And PatientDoctor Consulting Patient

Improper coding can also have an impact on patient care. Should past treatments and procedures be improperly coded, it may provide incorrect information to doctors and nurses, leading to mistakes in treatment. This can lead to negative patient outcomes, as well as litigation against health care providers.

By properly training medical coders, honest mistakes that can lead to audits are more easily avoided. Coders also get a thorough indoctrination concerning the consequences of fraud, which makes them far less likely to go rogue.

Common Types of Medical Billing Fraud

There are a variety of ways that fraud occurs in medical billing. Some of the most common include:

  • Upcoding – Upcoding occurs when claims submitted by medical care providers are for more involved services than those actually performed. For example, a patient may seek treatment for a sprained wrist, but the hospital or doctor’s office may upcode the bill to represent that it treated a broken wrist. Upcoding often slips by insurance companies, who are dealing with huge volumes of bills, but, when upcoding is discovered, penalties can be harsh.

Consider the case of The University of Texas Southwestern Medical Center at Dallas, which recently settled for $1.4 million to resolve allegations that staff upcoded Medicare and Medicaid claims. The hospital never admitted wrongdoing in the settlement, and it is entirely in the realm of possibility that the erroneous claims resulted from mistakes in coding.

  • Phantom billing – Phantom billing results occur when health care providers bill for services that were never performed. It may involve billing for visits or procedures that never took place or double charging for procedures. Phantom billing serves to drive up the cost of health care for everyone and also increases costs because of the steps the government takes to stop it. The government is cracking down on phantom billing and has hired revenue audit contractors who get a percentage of any fraudulent or incorrect billing practices that they find.
  • Overcharging – Medical care providers who charge vastly inflated prices for products or services are a big source of billing fraud. Some examples of overcharging include hiking prices for simple equipment like screws or staples to hundreds or thousands of dollars.
  • Service unbundling – When health care providers separate services or procedures intended to be billed as a package bill, charging higher prices for each service or procedure, unbundling occurs. Medical coding experts say that unbundling is just another form of upcoding. Service unbundling happens frequently among Medicare and Medicaid patients.
  • Self-referrals – This form of fraud occurs when a doctor refers patients to himself or another doctor from whom he or she receives a kickback to do testing for that patient.

Professional Holding Medical File

AAPC Certification

Professionals seeking medical coding certification should take courses to become American Academy of Professional Coders certified. This standard of certification is recognized industry-wide for ensuring that coders are competent and professional. AAPC Coding certification courses typically take about 18 months to finish, although coders currently working in the field can complete training for the exam in six months. The courses prepare students to take the AAPC National Certification Exam. Students who pass the exam with a score of 70 percent or better will receive AAPC Certified Professional Coder Certification.


LS Coding & Education LLC provides quality coding certification courses to help prepare medical coders for the AAPC National Certification Exam. With a flexible, online format and convenient delivery options, LS Coding & Education provides a convenient means for working adults to attend coding classes. With LS Coding & Education instruction, current and aspiring medical coding professionals can get the training they need to ensure their work is accurate, helping them and their employers avoid the consequences of improper coding. L S Coding Instructors are licensed by the AAPC to provide the AAPC Curriculum.

Contact us today to learn more about the coding certification process.