chevron-down Created with Sketch Beta.
May 29, 2024

Top 3 Clinical Issues Trending in Healthcare Fraud and Abuse Litigation

By Elizabeth Murray

Sixty-seven percent of the Department of Justice’s (DOJ) record-setting $2.68 billion in 2023 False Claims Act (FCA) settlements and recoveries were focused on healthcare fraud and abuse. The DOJ report on FCA filings tracks annual recoveries and investigations and dates to 1987 when Congress strengthened the FCA by increasing incentives for whistleblowers (known as “relators”) to file qui tam lawsuits alleging false claims on behalf of the government. For nearly 30 years thereafter, the government-filed healthcare FCA claims stagnated while privately filed claims increased. In the mid-2000s, primarily fueled by the alarming opiate crisis, the government, and specifically the U.S. Department of Health and Human Services (HHS), increased its budget and interest in healthcare-related claims. Since then, the volume of government referrals and investigations has surged, as have cases in which the government intervened in relators’ healthcare-focused qui tam cases.

The statistics alone fail to capture the trends in clinical issues to mitigate risk and identify red flags in current practice. The HHS Office of Inspector General (OIG) publishes a dynamic work plan that is adjusted “throughout the year to meet priorities and to anticipate and respond to emerging issues with the resources available.” Current recently added active work plan items include Medicaid nursing facility supplemental payments, audit of vertically integrated Medicare Part D sponsors, and utilization of peripheral vascular procedures. The agency updates the work plan on the website monthly. Projects listed in the work plan include the Centers for Medicare & Medicaid Services (CMS), Centers for Disease Control and Prevention (CDC), National Institutes of Health (NIH), and many other administrative health agencies. Tracking these additions to the work plan can inform where an auditor should focus on risk. However, HHS-OIG may want to focus on a topic beyond FCA litigation for many reasons. The top three trending clinical issues are listed below based on several years of nurse review and investigation into whistleblower allegations by the government and private whistleblowers. 

Trending Issue #1: Upcoding and Undbundling    

Upcoding and unbundling practices involve billing for more expensive services or procedures than those provided or improperly billing separately for services that should be billed together as a bundle. While an upcoding may involve only a few dollars increase in the reimbursement, when fraudulently billed systematically over months or years, the results significantly inflate healthcare costs. It is difficult to pinpoint the exact amount settled and recovered in the past year attributed to upcoding and unbundling specifically, as allegations of a wide variety of healthcare fraud schemes also include an element of upcoding or unbundling. A 2024 article in Health Economics Review audited data from 2010–2019 and found that on average, upcoding for hospitalizations under Part A represented $656 million annually, upcoding for physician serves under Part B averaged $2.38 billion annually, and estimated upcoding in Medicare Part C at $10–15 billion annually.

Medical coding and billing specialists credentialed in their competencies use guidelines and systems to review records and bill appropriately. CMS developed the National Correct Coding Initiative (NCCI) program to “promote national correct coding methodologies and to control improper coding that leads to inappropriate payment of Part B claims.” The coding policies are based on the American Medical Association’s (AMA) Current Procedural Terminology (CPT) Manual and the Healthcare Common Procedure Coding System (HCPCS), as well as standards of care developed by national societies, evidenced-based medical and surgical practices, and national and local Medicare policies and edits.

The practice of coding is complex and ever-evolving. Artificial intelligence and machine learning models are developing to replicate what a human coder performs, but the level of nuance has yet to be achieved. For example, the average evaluation and management (E/M) code for physician services, whether for an emergency department (ED) visit or a specialty or primary care office visit, involves reviewing the clinical notes elements required for each level of billing in each section of the visit note, the correlation of the presenting problem with the assessment and plan, and the complexity of the medical decision making. The complexity of the decision making alone is based on how many diagnoses or management options are considered, the amount and complexity of data reviewed, and the risk of complications and morbidity or mortality present. When an outside observer considers two types of visits—for example, the first for an ED visit focused on a bruise present on an extremity that is improving but hasn’t resolved, and the second for a patient with complaints of chest pain and syncope present for the past hour and arriving by ambulance—it is easy to say that the first visit appears to be of lower complexity and a lower E/M billing code. While those two visit details appear clearly defined and are at the end of each spectrum of E/M billing, most office visits do not neatly fit in the box of the lowest or highest billing code and require record review by a nurse auditor or professional coder for analysis of the presenting issues, assessment, and treatment.

Proving or defending an FCA case alleging upcoding requires detailed medical records and billing data analysis to identify discrepancies and patterns indicative of fraudulent billing practices. These cases do not focus on one-off determination errors that occur occasionally, but on systematic and methodical manipulation of the policies and guidelines to increase revenue fraudulently. Data analytics can also determine when a provider or facility’s coding appears reasonable or out of the ordinary. For instance, the E/M code 99215 is for an “office or other outpatient visit for an established patient” with extensive management options, extensively complex data for review, high risk of morbidity or mortality, and high complexity medical decision making. The rate at which this is billed annually varies among specialties but usually hovers around 5% of billed visits for many specialties. False claims are not identified alone by aberrant billing statistics; this type of data can bolster allegations by a relator. In any case, data analytics is not a unique source of support or defense, because there are a wide variety of reasons a practice may bill a higher number of complex visits, including the patient population or the provider’s reputation attracting more challenging patients. Aberrant data trends, a well-prepared relator, and a detailed analysis of records and billing over multiple years of the alleged fraudulent claims can lead to a successful qui tam recovery. Facilities and providers can use data analytics to identify possible risk areas, bolster documentation education for providers, and provide updates in coding guidelines by reviewers.

Upcoding is a large subset of clinical issues in FCA healthcare fraud because it encompasses any fraudulent, systematic billing for more expensive services or procedures throughout the five sections of the CPT code set. The five sections are evaluation and management services, anesthesia, surgery, radiology procedures, pathology/laboratory procedures, and medicine services/procedures. Upcoding and unbundling allegations and litigation run the gamut of all five areas.

Trending Issue #2: Telehealth

Medicaid no longer uses the term “telemedicine” but instead refers to all categories of this type of healthcare under “telehealth.” HHS categorizes telehealth into several categories:

  • Synchronous care: A live interaction between a provider and a patient, such as video calls, audio-only calls when a video visit is not an option, and secure text messaging to answer patient questions.
  • Asynchronous (also called “store and forward”): Communication or information shared between providers, patients, and caregivers at different times, such as messaging with follow-up instructions, images sent for evaluation, and lab results.
  • Mobile health (mHealth): Using a digital device such as a smartphone or a wearable to support patient health, like a fitness tracker or medication reminder.
  • Remote patient monitoring (RPM): The transmission of patient data and clinical information to the provider through in-home devices or information entered and transmitted electronically by the patient, such as blood pressure monitors, pacemakers, glucometers, and pulse oximeters.

During the COVID-19 pandemic, telehealth benefits for Medicare beneficiaries expanded under the Section 1135 waiver authority and the Coronavirus Preparedness and Response Supplemental Appropriations Act. Prior to the pandemic, telehealth existed but was not reimbursable by Medicare except in limited circumstances. Presently, telehealth usage remains higher than pre-pandemic levels, and 80% of physicians plan to continue using it.

The most notable recent cases with the highest losses and recoveries of telehealth fraud, including the 2019 Operation Brace Yourself and the 2021 COVID-19 Health Care Fraud Takedown, involved false claims for durable medical equipment (DME), unnecessary medical testing, and laboratory tests. They resulted in civil and criminal charges and billions of dollars in losses. The categorization of telehealth in most of the high-dollar loss schemes involved stealing the personal health information of Medicare and Medicaid patients and using the stolen personal health information to create false claims by documenting phone visits. In some cases, the fraudulent call centers would actually call the patients to solicit DME or services, and in some cases, the documented interactions with patients were completely falsified. In some cases, patients received unneeded supplies and equipment; in others, the DME never existed. These schemes continue and primarily victimize older patients, who may not be able to determine if a call, email, or social media link is genuinely from their providers.

Clinical risk mitigation for healthcare providers using telehealth in appropriate ways also involves issues such as staying current with policies, regulations, and requirements modified after the COVID-19 pandemic. The COVID-19 PHE ended on May 11, 2023, but the Consolidated Appropriations Act 2023 extended many telehealth flexibilities through December 31, 2024. Each state has its own store and forward billing policies under Medicaid coverage. Some asynchronous tasks, such as virtual check-ins, can be billed to specific Medicare codes. Providers should know whether a telehealth service meets the requirements for audio-only requirements, if the category is permanent or provisional, and the CMS review criteria for the date of service, which has been revised through CY 2024. When used appropriately, the increased adoption of telehealth creates clinical benefits such as treatment of a broader range of populations, reduced rates of complications, and decreased numbers of future physician visits or hospitalizations due to greater access to medical advice and communication.

Trending Issue #3: Billing for Medically Unnecessary Services

Examining trends in patient record reviews investigating allegations of almost any type of systematic healthcare false claim, the most common coincidental finding is additional claims for medically unnecessary services. As with most healthcare false claims, the patient sometimes received additional billed services and was sometimes billed with no associated patient involvement. Among the types of false claims that can result in harm to a patient, medically unnecessary tests, treatments, and therapies are among the top reviewed with clear evidence of objective harm. Some examples of medically unnecessary care that can result in not only fraudulent financial losses but also harm include:

  • Patients who unnecessarily undergo painful or lengthy testing experience and stress and fear of severe conditions that a provider does not reasonably suspect.
  • Patients for whom an unnecessary service, such as physical or occupational therapy, is not indicated and may cause additional pain or injury.
  • Patients who experience substandard care or medical errors while receiving an unnecessary medical service are further harmed.

When one type of egregious healthcare fraud and abuse is present, it is common for the additional findings of medically unnecessary services to rear its head.


Implementation of a robust compliance program, monitoring trends in data and billing, and education with billers and providers can mitigate many clinical billing issues trending in litigation. The culture of a healthcare organization or practice must reflect a commitment to patient care and safety in its clinical documentation, rather than using clinical documentation primarily as a tool for reimbursement. Clinical documentation exists to communicate a patient’s status and needs between providers, and while it is utilized to support billing, that is not its primary purpose. There are systems in place to correct entry errors legitimately or one-off mistakes but any time there is a concentrated effort to alter medical records systematically to improve reimbursement that is a red flag for any compliance professional. 

Elizabeth Murray, BSN, RN, LNCC

Elizabeth Murray Consulting, LLC, Springfield, VA

Elizabeth Murray, BSN, RN, LNCC, is a Legal Nurse Consultant providing expert analysis of the standard of care in health law issues, particularly qui tam actions as a contractor for Offices of the United States Attorneys, and is the owner of Elizabeth Murray Consulting, LLC. Ms. Murray is a former U.S. Army officer and has extensive experience in adult and pediatric critical care and emergency nursing. She has worked in the legal nurse consulting field for 20 years, consulting on False Claims Act allegations, medical malpractice, mass torts, and long-term care litigation. She served on the Department of Justice 9/11 Victims Compensation Fund early in her career as a legal nurse consultant. She is a Past President of the American Association of Legal Nurse Consultants (AALNC) and a Vice Chair in the ABA Health Law Section Nursing and Allied Healthcare Taskforce. 

    The material in all ABA publications is copyrighted and may be reprinted by permission only. Request reprint permission here.