RACs Incentivized to Find Even Smallest Billing Errors

Greg Freeman , February 5, 2014

In addition to the auditors nitpicking your claims, you could be turned in by one of your staff. The False Claims Act includes enticements for staff to blow the whistle on healthcare fraud and offers substantial rewards, notes Dan Purdom, JD, a partner in the Health Care and White Collar practice in law firm Hinshaw & Culbertson's Lisle, Ill., office.

He has represented numerous medical providers who have been involved in federal, state, and regulatory investigations of alleged healthcare fraud and related problems. Purdom taught healthcare fraud investigation at the FBI Academy in Quantico and was an author of the Department of Justice Manual on Prosecution of Healthcare Fraud. In 1986, as an Assistant U.S. Attorney in the Northern District of Illinois, he prosecuted what was then the largest healthcare fraud in the United States, dismantling a $20 million Medicaid fraud scheme.

Under the False Claims Act, intention to deceive payers is not necessary to prove guilt and liability, Purdom explains. Rather, the government only needs to prove reckless disregard resulting in invalid claims, a much lower standard. Reckless disregard can occur when a coder submits incorrect bills repeatedly, perhaps making the same mistake over and over for some period of time, and the practice does not catch the error.

An auditor may find that error, but often a practice insider will realize the problem and report it to regulators. The problem is compounded if the whistleblower can show that he or she notified practice leaders but no action was taken to stop the billing errors or correct past claims, Purdom says.

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2 comments on "RACs Incentivized to Find Even Smallest Billing Errors"

Arlen Huller (2/11/2014 at 8:55 AM)
Unfortunately the RACs can go back THREE years!

Arthur T Walker (2/5/2014 at 9:50 PM)
Now retired, but am recalling a Rac billed me for $600+ for treatment delivered more than 2 years prior. I hand wrote on their letter "I reject this notice as too late to consider". Never heard from them again.




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