fake medical bill

Scams and fake medical bills have been an issue in the medical sector for centuries. Hospitals, doctors, and those who process the bills (insurance companies) have had no easy method to halt them or make them less likely to occur. The healthcare business needs a quick method to prevent the payment of fake medical bills and the acceptance of bogus claims.

Fake medical bill scams, which affect both individuals and businesses, directly cause losses in billions of dollars. It could increase health insurance costs, put the patients at risk for medical procedures they do not need, and make them pay more taxes.

This article aims to shed light on fake medical bill scams. The post highlights some of the most common scams related to fake medical receipts and bills. Continue reading to find out how fake medical bills affect the healthcare industry.

Fake Medical Bill Scams

Currently, the health care system administers the procedure manually, which is time-consuming, costly, error-prone, and labor-intensive. The US medical business loses millions of dollars annually due to fraudulent schemes or fake medical bill scams.

A considerable percentage of healthcare fraud is committed against Medicare and Medicaid, which are government-run and tax-funded health insurance programs. Due to their small size, they are easy to capture. Around 1% of Medicare claims are audited. Medicare, however, can process up to 4.5 million claims each day. These projects are in peril due to insufficient funding. There are not enough employees to monitor everything constantly. This enables the submission and payment of bogus claims or fake medical bills.

Common Frauds Involving Fake Medical Bills

Various incidences of medical fraud with fake medical receipts have been reported. For instance, healthcare fraud involving pharmacies has risen in the past five years. Pharmacists are billing Medicare for more expensive medications. Similarly, other areas are also involved in fraudulent activities. Even ambulances and their personnel have committed fraud. By telling the patients that they cannot walk, they fake the need for getting ambulance service. In this manner, the ambulance business bills Medicare $400 for every emergency pick-up.

Some of the common medical frauds are discussed below:

  • Upcoding

Imagine that a patient visits the hospital for a sprained ankle and receives care, but the hospital bills the patient’s insurance company for a fractured ankle. This issue is referred to as “upcoding.” The physician must supply the CPT code list with each claim as proof that each treatment and therapy was performed. These codes indicate how lengthy or short the bill for the therapy should be. Most insurance companies use computers and receive numerous hospital and provider invoices daily; they frequently overlook minor coding errors. Since these companies must make various types of payments, they frequently overlook these kinds of errors or fake medical bills.

A recent case of a fake medical bill involves two individuals convicted guilty of health care fraud in a $1.4 billion scheme involving rural hospitals in Florida. Jorge Perez and Ricardo Perez, both of Miami, Florida, collaborated to illegally bill for approximately $1.4 billion in laboratory testing services that were not medically necessary. They exploited rural hospitals as billing shells to submit claims for services performed mostly at laboratories outside rural hospitals.

  • Phantom Billing

Invoicing for services that were never performed is one of the most common forms of billing fraud. This type of fake medical bill scam increases the cost of health care because the charges are unjustified, but it also costs millions of dollars annually to detect, prevent, and track this fraud. These claims affect the federal budget, policy, and a patient’s total health insurance liability. Financial claims reveal the services rendered to patients and can influence their future care.

In an incident of phantom billing reported in Newark, Benjamin Sabido pleaded guilty to healthcare fraud in federal court. He obtained $237,182 fraudulently from December 2006 to April 2010. He instructed employees to submit fake physical therapy bills. He compelled unqualified personnel to administer physical treatment, such as electrical stimulation, massage, and other services. He did not employ any licensed physical therapists or other trained professionals. The physician was sentenced to 10 years in prison, along with a fine of $250,000.

  • Inflated Bills

One sort of overcharging is sending inflated medical bills to insurance companies to overcharge them for treatment. Linda Burdick, chief assistant state attorney, stated that she underwent back surgery and that her insurance company gave her an excessively high bill for $60,000. She requested assistance from financial investigators, who determined that the charge was excessive for items such as six surgical screws, which cost $1,750 each. Everyone who receives hospital care must review their bills for errors such as overcharging and double billing.

  • Service Unbundling

This fraud occurs when a hospital invoices separately for various procedures that should have been billed as a package. Due to this independent billing method, the charges appear extremely high. Unbundling is a sort of up-coding. These fraudulently high billing practices target Medicaid and Medicare patients because they provide discounted bundle packages for typical operations like lab tests and scans. Providers and healthcare professionals bill individually for these packages and the package fees are deducted to increase profits illegally.

  • Self-referrals

Self-referral is a practice that needs an awareness of its illegality. Self-referral is when a physician or other medical practitioner recommends themselves for a surgery or procedure that a patient requires to get compensated. Self-referral is prohibited because unnecessary treatments waste money and effort.

Reporting Frauds

A significant portion of the medical business is self-regulated, which is positive. If a physician suspects that a provider, another physician, or a hospital is committing fraud, they must inform the appropriate authorities. In addition, if they observe something that poses an urgent threat to a patient, they can inform the state licensing authority or the medical community to take quick action.

Even if a patient believes that the healthcare provider is engaging in unethical or illegal conduct, they can file a complaint so that either the quality of healthcare can be improved or the clutter that led to believe the process in the first place can be removed. Notifying the state’s health department about fake medical bill scams or frauds is crucial.

See Also: Protect Yourself From Surprise Medical Bills


Fake medical bill scams could increase health insurance premiums, the likelihood of unnecessary medical procedures, and the tax burden. Purposefully deceiving the healthcare system to obtain illicit benefits or payments is a healthcare fraud that needs to be reported to the concerned authority.

Contact Precision Hub if you want to maintain accurate medical billing. We are experts who will streamline the billing process for your practice while remaining compliant with HIPAA regulations. Call us right now, and we will help you out. (888) 454-4325

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