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.