Retired OIG Special Agent and Advize’s Director of Litigation & FWA Support will be stepping in each week to examine current fraud trends from the lens of an investigator. Stay tuned for weekly insights, updates, and information on healthcare’s most expensive crimes.

Two phrases that are common in the healthcare fraud world are: phantom billing and services not rendered.  Although similar in some respects, they are different fraud schemes, they’re often confused with each other.

In a “services not rendered” fraud scheme, the provider actually sees the patient, but adds in services that were not rendered on that particular date of service. This type of fraud is often difficult to uncover because the Medicare population may recall going to the provider on a particular date of service but not be able to articulate exactly what services they had or didn’t have, as the case may be.  For those of you who have interviewed Medicare beneficiaries in the course of an investigation, you can appreciate the difficulties that the senior population has with respect to recalling dates and events. As such, with services not rendered, a provider may document a particular service that was never rendered, and the Medicare beneficiary has no recollection either way.

Phantom billing, however, involves an instance or instances in which a provider submits claims seeking reimbursement for services on dates of services when the Medicare beneficiary was never seen by the provider on the date in question. Although these scenarios may also be difficult in some regard, to prove, there are corroborating methods to cross reference the truth of the matter asserted, which is that the Medicare beneficiary was never at the provider for the date of service billed.  Outside of some of the more conventional methods used by law-enforcement to corroborate that a Medicare beneficiary was not at the provider, there are some unique tools available to also independently verify that a Medicare beneficiary was or was not at the provider. It is important to add that both of these schemes occur in all payer markets; I am just using the Medicare population as an example.

Such tools however will be of great use for the next generation of beneficiaries because the next generation is much more technologically savvy. Applications on cell phones for example that can date and time stamp to a GPS location can affirmatively prove that a person was or was not at a particular providers office on the date the claim was submitted. My father, who is nearly 80, is just not there with electronics to be able to use these tools to their potential. That is not to say there may not be limited use for this generation, but the wider the use of an anti-fraud measure, the greater coverage and enhancement of capabilities on the adjudication end.

I was recently provided a demonstration of a software application installed on a cell phone that did just this and was inordinately impressed by the possibilities. If such technology was widely deployed by insurance plans to its members, the issue of phantom building could be 100% rectified.  These tools can have an immediate positive anti-fraud effect in climates where the covered lives are able to understand, use and be aware of the implications of using such applications.

Advize Health LLC is a healthcare advisory and consulting company that provides a breadth of healthcare industry services in the payer, provider, and legal communities. Contact Eric Rubenstein for more information on our Fraud Spotlight series.