The Most Costly Billing Practices Ever

Nayna C. Philipsen, JD, PhD, RN, CFE; Patricia D. Setlow, MSN, FNP; Ilene S. Jacob, RN, AHFI


Journal for Nurse Practitioners. 2008;4(10):761-65. 

In This Article

Unprofessional Conduct

Unprofessional conduct is the "catch-all" grounds that a nursing board can use to discipline a nurse for many different behaviors that do not fall into another category but may still jeopardize a nurse practitioner's license. Examples in billing include:

  • Failure to produce complete medical records, which are required to validate the billing codes

  • Delegating treatment to individuals who cannot provide it within their scope of practice

  • Performance of tests or other procedures without valid consent

In some states, there is special jeopardy for particular violations of valid informed consent, which exist in other parts of the law outside the Nurse Practice Act. These are different in different states. For example, in Maryland special informed consent is required when performing AIDS testing, and nurse practitioners are obligated to provide full information about treatment options for breast cancer. In either situation, the practitioner is not entitled to additional reimbursement for these mandated services.

Documentation is required in private practice, as well as at institutions, in order to submit a bill for services. Undocumented diagnoses and care are not reimbursable. Likewise, illegal treatment or care is not reimbursable. This includes illegal delegation. For instance,

  • A practice with an in-house lab had a "protocol" implemented by the receptionist that consisted of a list of lab tests, including blood and urine tests, on all patients before they saw a caregiver. Because no licensed provider saw the patients before the tests, there was no valid order for them. All lab tests require a patient assessment and a valid order to be reimbursable.

  • An NP billed for office visits, but was often out of the office. The office visits, including vital signs, identification of complaint/problem, "triage" and testing, were done by a "medical assistant." Because the NP could not legally delegate any nursing functions to a medical assistant, her license was not only in jeopardy for billing fraud, but also for aiding unauthorized persons in the practice of nursing.

Careful billing is a professional and civic duty. Careless billing is a threat to our health care system and an injustice to patients and insurers. Intentional carelessness or wrongdoing in billing for services is fraudulent criminal conduct. NPs who recognize that they need to learn more about coding should do so. They should attend coding seminars and/or use updated provider coding manuals from the relevant health plans. They should also consider hiring a consultant or specially trained billing employee, a certified coder, to complete insurance claims. An annual outside audit will not guarantee that fraud is uncovered, but practitioners should ask their auditors to suggest better internal controls or practices for billing and payment.

What if an NP is doing his or her best to practice proper billing coding and follow all relevant laws, but a supervisor orders him or her to engage in one of the above noted practices or alter a medical record to support a billing code? The answer is simple. Do not do it. When that wrongdoing is discovered, the supervisor who directed a fraudulent activity is extremely unlikely to suddenly find integrity and to take one bit of blame for the behavior of the NP.

What if an NP is doing his or her best to practice proper coding and follow all relevant laws, but observes a colleague or supervisor doing differently? There are a number of options. Circle the option or options that you think are correct:

  1. Ignore it. It is not your business.

  2. Describe to your colleague the practice that you observed that might not be correct coding, and give your colleague information on correct coding that supports your concern.

  3. Contact a coding consultant to verify the particular coding situation with the colleague.

  4. If the coding practice continues, report the practice, with examples, to the insurance provider and to the appropriate professional licensing board (nursing, medicine, physical therapy, etc).

  5. Look for another job.

If you choose number 1, you lose. Any combination of the other choices may be correct, depending on your situation and on the responses of your colleague.

All NPs need to recognize that nurses are human, and subject to temptation. Greed is a universal human challenge and one of the "Seven Deadly Sins" from the Medieval Period. A nurse has a problem if he or she is saying, "Everybody does it" or "I deserve this because the insurance companies do not pay enough if I bill the way they tell me to." Those are great big red flags that should not be ignored. If that nurse is you, then you are engaging in billing fraud, and you know it.

Billing fraud leads to higher premium assessments by the insurance companies. The Health Insurance Portability and Accountability Act of 1996 (HIPAA) is a significant health care reform law that passed Congress in 1996. The primary purpose was to provide better access to health insurance as well as toughen the law concerning health care billing fraud. HIPAA prohibits billing for medical services "that a person knows or should know are not medically necessary." Violation of HIPAA may result in monetary penalties up to a $10,000 and an additional cost of 3 times the dollar amount for each claim. These crimes are also punishable by up to 10 years in prison, or even life in prison if a patient dies as a result of fraudulent activity.

If you continue down the slippery slope of billing fraud, one day the computer, the unhappy patient, or the careful colleague will catch you. Until then, you are part of our nation's health care problem, not the solution. Fortunately, most NPs are dedicated, honest providers, anxious to charge patients according to federal and state laws.


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