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|Healthcare Fraud
Legally Reviewed by:
David Di Pietro
Managing Partner, Healthcare Fraud Attorney

Di Pietro Partner's goal is to advocate for you when you need our help. Our team of experienced legal and medical professionals are dedicated to providing high quality informative content. The information on this page and other areas on the website is routinely fact checked, updated, and approved by our team of licensed attorneys and professional editors. If you find any errors, feel free to let us know and we will review the information immediately.

Ambulatory Payment Classification (APC) fraud refers to deceptive practices related to the billing and reimbursement system used primarily for outpatient services under Medicare. The APC system categorizes outpatient services into groups based on clinical similarity and the resources they require, with each group assigned a fixed payment rate. This system is designed to streamline billing for outpatient services and ensure consistent reimbursement for similar types of care.

Examples of APC Fraud

APC fraud typically occurs when healthcare providers manipulate the billing system to receive higher reimbursements than they are entitled to. Here are some common forms of APC fraud:

Upcoding – This involves billing for a higher-level service category within the APC system than the service that was actually provided. For example, a provider might perform a simple, less expensive procedure but bill it under a category reserved for more complex and costly procedures.

Unbundling – In the context of APCs, unbundling occurs when services that should be billed together under a single APC are instead billed separately to increase the total reimbursement.
This goes against the consolidated nature of APCs, where related services are grouped to prevent piecemeal billing.

Providing Medically Unnecessary Services – This form of fraud involves performing and billing for services or procedures that are not medically necessary, simply because they fit into a higher-paying APC category.

Misrepresenting Services Provided – This could involve altering medical records or documentation to make it appear that a different service was provided, one that falls under a higher-paying APC.

Medicare Health Insurance card overlayed on top of the capital building with money also overlayed on the image

Who Can Report APC Fraud?

Anyone who becomes aware of Ambulatory Payment Classification (APC) fraud can report it. This includes a wide range of individuals and entities. Here are some common types of individuals and entities that report APC fraud,

  • Healthcare Professionals: Doctors, nurses, medical technicians, and other healthcare providers who observe irregularities or inconsistencies in billing practices are often in the best position to identify APC fraud.
  • Administrative Staff: Those who work in the billing or administrative departments of healthcare facilities may notice discrepancies or improper coding practices that suggest fraud.
  • Patients: Patients who review their billing statements and notice charges for services they did not receive or services that seem excessively coded may identify potential APC fraud.
  • Auditors and Compliance Officers: Professionals whose roles involve reviewing and auditing medical billing and coding for accuracy and compliance can detect and report discrepancies that may indicate fraud.
  • Whistleblowers: Any employee or individual connected to a healthcare operation who discovers fraudulent activities can act as a whistleblower. They can report the fraud confidentially and may be protected and even rewarded under laws like The False Claims Act.
  • Insurance Company Employees: Insurers who process claims and reimburse healthcare providers can spot patterns or anomalies indicative of APC fraud.

It’s important for anyone who suspects APC fraud to report it to maintain the integrity of healthcare billing and ensure that Medicare funds are used appropriately. Reporting can be done through various channels, including the Office of Inspector General (OIG), the Centers for Medicare and Medicaid Services (CMS); it’s highly advised to report APC fraud through legal means with the assistance of a healthcare fraud attorney.

How to Report APC Fraud

To report Ambulatory Payment Classification (APC) fraud effectively, start by gathering and documenting any evidence of the fraudulent activities, including billing statements and medical records that support your suspicions.

It’s crucial to do this carefully and legally to protect your rights. Consulting with a healthcare fraud attorney is a wise next step, as they can guide you through the process, help you understand your rights, and offer protection against potential retaliation.

You can then report the fraud to the Office of Inspector General (OIG) or the Centers for Medicare & Medicaid Services (CMS), which are the primary agencies for investigating healthcare fraud. Ensuring you’re covered by whistleblower protections is important to prevent any backlash from your actions.

Stay engaged with the process by following up with the investigating agencies and providing additional information as needed to support the investigation. This approach not only aids in addressing the fraud but also helps protect the integrity of healthcare funding and services.

More on APC Fraud

APC fraud is a major concern because it directly undermines the financial stability of healthcare systems, leading to increased costs for taxpayers and potentially compromising the quality of care provided to patients. This type of fraud can strain the resources of Medicare and other healthcare programs, diverting funds away from necessary medical services and into the pockets of fraudulent entities. Additionally, it can erode trust in the healthcare system, making it harder for genuine providers to operate efficiently and for patients to receive the care they need without undue financial burden. In fact, according to The Home Health Service, INC’s website:

APC Home Health Service is an active member under the Inspector General Integrity Initiative (IGII). We are committed to providing quality services with utmost honesty and integrity in every encounter with our clients and the medical community as a whole.

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