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6 Unethical Medical Billing Practices – Billing Freedom

by | Jul 6, 2022

In this article, we have listed some of the most common unethical medical billing practices. Just like in any other industry, mistakes are bound to happen, but crooked professionals also try to manipulate the system on purpose. Whether intentional or not, unethical billing practices have actually plagued the system and made patients’ life difficult and wasted resources.


Each medical procedure has a corresponding billing code and healthcare providers use these codes while submitting the claims. Billing codes determine how much medical practitioners would be paid for each medical procedure or service they offer. Simply put, upcoding is when a medical provider misuses the billing codes.

Let’s take the example of a physician who provided a simple medical service to a patient. Now, instead of coding it as it is, the physician coded it as an extensive medical service to get higher rates of payment than what they should be charging for the simple service.

Practices involving upcoding often go unnoticed because patients are not very familiar with CPT codes and it can vary even down to the minor details because of the modifiers. For instance, speech fluency and speech evaluation complex have different codes. Medical practitioners understand the difference between these two medical services, but for patients who don’t know a big deal about medical jargons and CPT codes, both of these might just sound similar.

If you are a patient, it is crucial to be on the lookout for these fraudulent activities in your medical bill. If you spot upcoding in your medical bill, you should contact your healthcare provider and immediately ask them to rectify the mistakes.


Undercoding usually occurs due to oversight. When the codes on your medical bill doesn’t completely capture all the services or procedures performed, it is called undercoding. While one may not consider it an unethical medical billing practice, undercoding can actually backfire in the long run.

Healthcare providers should avoid undercoding because authorities might interpret it as if they are avoiding an audit. Resultantly, undercoding can result in criminal charges because authorities may consider it participating in medical fraud. Moreover, undercoding can lead to substantial revenue loss and lower reimbursement rates for medical practitioners, and they can be a burden on the healthcare system.


Unbundling is one of the unethical medical billing practices that are similar to upcoding. Healthcare professionals use this scheme to manipulate the coding system to receive higher amounts for the services provided to patients. According to the Federal Bureau of Investigation (FBI), unbundling is a practice of submitting bills in a fragmented manner to maximize the reimbursement for various procedures that should be billed together at a reduced cost.

Unbundling can be referred to as fragmentation because instead of billing the patient with one code, physicians and medical coders would fragment it into multiple codes to receive higher reimbursements. Just like upcoding, unbundling is difficult to detect because people receiving healthcare services are not always familiar with the CPT codes.

Double Billing

Simply put, double billing occurs when the same bill is submitted multiple times even though the medical service was provided only once. Double billing is a common practice in the medical field. While there can be occasional mistakes, some practitioners double bill intentionally. And those who deliberately double bill or are involved in other unethical medical billing practices may face criminal and civil penalties.

It might seem easy to fix the double billing, but it is not. It would impact the medical practice’s revenue as the cost goes beyond fines and fees. What’s even worse is that patients would hesitate to receive healthcare services from a provider or facility involved in the unethical practice of double-billing. Patients may even call the insurance company to remedy the situation which could damage the trust between the insurance company and the provider. Providers must ensure that they are not resubmitting duplicates without further studying them.

Read also: What is Transitional Care Management


There are different forms of this unethical billing practice:

  • Misrepresentation of locations of service 
  • Misrepresentation of dates 
  • Misrepresentation of the provider of service


  • Misrepresentation of locations of service

Some patients are billed for services that are not consistent with what they receive like being billed for the injection administered in the clinic when a clinician handed the patient a syringe and told them to be administered at home.

  • Misrepresentation of dates

Billing claims that healthcare providers submit are quite often not consistent with the date of service provided to patients. For instance, A healthcare professional provides their services for one day but charges for two days instead.

  • Misrepresentation of the provider of service

Some healthcare facilities allow unprofessional and untrained staff to perform medical procedures and claim for services provided by physician assistants. This is not allowed under government regulations.


Healthcare providers sometimes receive payment for referrals and kickbacks for referrals are illegal. This practice also leads healthcare professionals to recommend other medical procedures or services when they aren’t required. Providers then file claims to receive higher reimbursements for the unnecessary services and patients suffer from this unethical medical billing practice they have to pay for the services they never needed in the first place.

Phantom Charges

It is a blatant fraudulent claim and also one of the most common unethical practices of medical billing. Phantom invoicing is easy to carry out as it involves charging patients for a medical service or procedure that was never rendered. It can also happen when a provider charges the patient for a medical procedure that was totally unnecessary i.e. a service given only to get a profit. Let’s take the example of a patient who never needed or received a wheelchair but the provider submitted a claim for wheelchairs. Nevertheless, phantom billing is a burden in the country’s healthcare system because resources are fraudulently spent and unnecessarily utilized.

It has also been observed that sometimes patients are accomplices to providers in phantom billing fraud. Some providers may offer monetary compensation to patients in exchange for their cooperation which is immensely unethical.


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    BillingFreedom is among the best medical billing services provider for healthcare practitioners, individual practices, physician groups, and hospitals. BillingFreedom is among the best medical billing services provider for healthcare practitioners,

    5 Reasons to consolidate your medical billing company on to a single platform

    Individual practices, physician groups, and hospitals.

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