| Read Time: 4 minutes | Healthcare Business Law
healthcare fraud prevention (1)

When people think of “white collar crime,” they usually think of the stock market.

But billions of dollars are stolen each year in healthcare fraud, one of the fastest growing white collar crimes in America.

In 2022 alone, a single healthcare fraud case brought charges against over a dozen fraudsters, claiming that over $1.2 billion had been stolen from American taxpayers.

Knowing how to prevent fraud and abuse in healthcare will help you avoid these types of losses.

Our nation’s health care system is complex, and federal programs like Medicare make it even more difficult for providers.

This complexity opens up many opportunities for fraud.

Therefore, healthcare providers need to find ways to prevent healthcare fraud before it happens.

In this blog post, the Massingill Law team will go over the basics of healthcare fraud.

We will also provide some pointers on how to prevent fraud and abuse in healthcare so you can protect your practice.

Contact us online today to get started!

What Is Healthcare Fraud?

Healthcare fraud is when someone intentionally deceives some part of the medical system to receive a payment or benefit they’re not entitled to.

These frauds can be committed by anyone who uses the healthcare system.

This includes providers—doctors, nurses, and physician assistants—and recipients of care, like patients. 

How to Prevent Fraud and Abuse in Healthcare

When considering how your practice can engage in healthcare fraud prevention, it’s essential to identify what specific practices may be fraudulent.

Knowing about current healthcare regulations and having a compliance plan ready is also helpful.

Read on for more information on how to prevent healthcare fraud.

Step 1: Identify Potentially Fraudulent Practices

Unnecessary Treatments

As a provider, you need to keep accurate records of services rendered.

These records will prove treatments have taken place and can help you not only guard against fraud but also defend against any malpractice lawsuits. 

However, some providers order treatments not supported by their patients’ medical records.

If you often identify expensive diagnostic tests ordered for common conditions, you may have an issue with unnecessary treatments.

“Upcoding” or Deliberate Miscoding

“Upcoding” or deliberate miscoding is when a service is provided or a diagnosis is made, but the provider bills insurance for a more expensive service or more serious diagnosis.

For instance, a patient comes in with a large cut on their face and a headache.

But if the provider codes “ brain tumor” and orders an MRI for no apparent diagnostic reason, you might have an upcoding problem.

You can engage in healthcare fraud prevention and protect your practice by checking with your billing team to ensure that your codes are correct.

Deliberate Misdiagnosis

This fraudulent practice is exactly what it sounds like.

A provider in your practice deliberately misdiagnoses a patient with a more serious condition to bill the insurance company or Medicare for a higher level of service.

This is similar to deliberate miscoding. However, the patient is aware of the diagnosis and procedure in this case.

With a miscoding, the patient may never be told.

Unbundling of Bundled Services

Under current Medicare regulations, some services are “bundled” and thus cheaper as a package.

It is fraudulent to unbundle these services, as it can easily raise the cost by two or three times.

You can prevent healthcare fraud by reporting this practice to the Centers for Medicare and Medicaid Services (CMS).


When providers refer patients to another provider without regard to patient needs, this can be a form of kickback.

Sometimes, kickbacks take the form of incentives, gifts, trips, and other “prizes.”

If you, or someone in your practice, is encouraged to refer patients to another provider in exchange for prizes, cash, vacations, or other rewards, be sure to carefully scrutinize your procedures and referrals.

Impersonating a Healthcare Provider

Typically, impersonating a healthcare provider is a fraud perpetrated by patients or other nonmedical professionals who steal information from your healthcare practice and use it to bill for services and equipment without a license.

If you notice strange receipts, requests, or complaints from vendors, contact Massingill as soon as possible.

We can help you on your healthcare fraud prevention journey.

Step 2: Understand Current Healthcare Regulations

To successfully navigate ways to prevent healthcare fraud, you’ll need a good understanding of healthcare regulations.

This includes the False Claims Act, a federal law making it illegal for people or companies to submit false claims related to federal health care programs like Medicare. 

Step 3: Maintain Good Data Security

Fraudsters often steal and use real patient data to bill for services never rendered.

You can help protect yourself by keeping your computer systems up-to-date and keeping patient data safely locked away.

If you have a data breach, contact an experienced healthcare attorney immediately.

Step 4: Audit Your Ordering and Billing Frequently

Even if you outsource your medical billing to a third party, the government will still hold you personally accountable for Medicare billing errors.

Regular audits of your billing practices with an independent party can confirm that your billing contains no errors.

An audit can also identify suspicious activity—such as charging for services not rendered—by anyone within your practice.

Step 5: Create a Compliance Plan

Create a compliance plan as a means of healthcare fraud prevention related to Medicare and Medicaid, including a section on auditing and internal monitoring.

An experienced healthcare lawyer can help you with this.

Step 6: Avoid Even the Appearance of Conflicts of Interest

Understand and avoid conflicts of interest. If they surface, disclose them immediately.

Such a scenario may involve accepting gifts from within the medical industry and speaking engagements.

How a Healthcare Law Attorney Can Help

Massingill represents healthcare clients across the State of Texas.

We can help your practice with all your business needs, from forming your business entity to compliance to detecting and resolving healthcare fraud issues.

Contact us today to schedule a consultation.

Author Photo

Joshua Massingill

Joshua Massingill is an attorney practicing in Austin, Texas. He serves on the Texas State Bar’s Law Practice Management Committee, the Leander Educational Excellence Foundation (LEEF) Board of Directors, and the Success-Werx Board of Advisors. He mentors young entrepreneurs in Leander ISD’s INCubatorEDU program and is active in his church.

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