Scroll through any law enforcement or OIG newsroom, and you’ll quickly learn that healthcare fraud comes in many shapes and sizes. There is no one-size-fits-all fraud scheme adopted by those looking to exploit the system for a buck (or a few million). This is what makes healthcare fraud such a persistent problem. Fraud examiners, enforcement agencies, and firms like Advize Health have found that healthcare fraud can look like anything from your next-door neighbor to the high-profile plastic surgeon in the city. Where there is motivation and opportunity present, there is rationalization to follow; the perfect fraud triangle.

So, if a fraudster can be anyone, and fraud can be anything, how do we know what fraud really is?

There is one upside to fraud’s ever-growing presence. It’s given the industry enough data to analyze, to categorize. Through reviewing countless cases and convictions, experts can identify the most common types of healthcare fraud, making it easier to identify for those who might not be quite as well-versed in the world of white-collar crime.

Upcoding & Downcoding

These fraternal twins of fraud are among the most common methods for defrauding the government and other healthcare programs. Upcoding and downcoding are incredibly detrimental to reimbursements and documentation accuracy.

Upcoding is usually the product of intention or improper billing practices. The term refers to instances in which providers bill and/or report a higher level of service than what is reflected in the patient’s true treatment plan. The higher levels of services are not typically supported by medical necessity or clinical documentation. This practice is often employed by providers using Evaluation and Management (E/M) codes, which rely on medical necessity for each reported service level. A higher level (Ex. 99214) will lead to greater reimbursements to providers than lower level codes (Ex. 99212).

Downcoding could be considered as “playing it safe”, as it is very literally the opposite of upcoding. Physicians may bill at a lower level of service performed to avoid accidentally upcoding, or to avoid being flagged for fraud during routine audits. We’ve seen a lot of providers make the mistake of downcoding in attempt to avoid committing fraud via upcoding – but the fact of the matter is that downcoding is fraud. Medicare describes fraud as “billing for services that were not performed”. This means that a well-intentioned downgrade in levels or reimbursement ask is still fraudulent, and still contributes to unnecessary variations in payment cycles and schedules.


Kickbacks are having a bit of a moment. Consumers are consistently surprised at the notion of providers giving and receiving kickbacks – which only seems to encourage such unscrupulous behavior. Kickbacks are what happen when doctors or medical facilities give or receive anything of value (cash, gifts, etc.) from another doctor, facility, or pharmaceutical company in exchange for patient referrals, medication prescriptions, medical device prescriptions, or other procedures driven by provider interest – rather than patient care. This happens often, and in many unconventional ways.

Medical Necessity

Providers may often perform medically unnecessary procedures as a part of an upcoding scheme, or as a standalone scheme. Medicare and Medicaid will and can only reimburse for procedures that are deemed medically necessary. To work around this, providers may document patient conditions as being more severe as they are in order to justify performing more expensive tests, imaging, procedures, and other diagnostics. These treatments may not even be relevant to a patient’s condition and are thus a direct violation of Medicare/Medicaid law.