Anti-Fraud Abuse Billing Laws

What Are Fraud and Abuse Laws?

Federal fraud and abuse laws protect government healthcare programs from false claims, kickbacks, and self-referrals. The False Claims Act (31 U.S.C. § 3729) imposes penalties of up to $28,619 per false claim plus treble damages. The Anti-Kickback Statute (42 U.S.C. § 1320a-7b) prohibits remuneration for referrals. Stark Law (42 U.S.C. § 1395nn) prohibits physician self-referrals. Violations trigger criminal prosecution, exclusion from federal programs, and massive financial penalties.

Who Do Fraud and Abuse Laws Affect?

All providers billing Medicare and Medicaid face fraud enforcement. Practices with physician ownership must ensure Stark Law compliance. Surgical centers and imaging centers face heightened scrutiny due to self-referral risk. The OIG Work Plan identifies fraud priorities annually. Over 3,000 providers are excluded from federal programs each year. Enforcement is accelerating: DOJ recovered $2.8 billion in fraud settlements in 2025.

Key Requirements

1. No employee, owner, or contractor can be on the OIG exclusion list (SIED/LEIE database). Practices must check exclusion status quarterly for all staff.
2. Billing must accurately reflect services provided. Upcoding, unbundling, or billing services not delivered violate the False Claims Act.
3. Physician compensation arrangements must comply with Stark Law safe harbors. Compensation tied to referral volume or case outcomes violates the law.
4. No remuneration can be paid for referrals. This includes direct payments, equipment discounts, office space subsidies, or other benefits conditioned on referrals.
5. Documentation must support every service billed. Claims billed without corresponding clinical documentation trigger False Claims Act liability.

Timeline & Enforcement

OIG publishes Work Plan annually identifying audit targets. Recovery Audit Contractors (RACs) identify suspicious billing patterns. Qui tam whistleblowers can file sealed complaints, triggering government investigation. DOJ enforcement actions typically take 2-3 years from investigation to settlement. Overpayment recovery demands arrive with 30-day payment deadlines. Excluded providers cannot bill federal programs retroactively; all claims during exclusion period are denied.

How to Comply

1. Check OIG exclusion databases monthly. Maintain documentation of exclusion checks for all staff, contractors, and referring physicians.
2. Conduct annual internal billing audits. Review 50+ claims monthly for coding accuracy, medical necessity, and documentation completeness.
3. Document all physician compensation arrangements. Ensure compensation is fair market value, not tied to referral volume or case outcomes.
4. Implement compliance policies addressing upcoding, unbundling, and improper billing. Train all billing and clinical staff on compliance requirements.
5. Establish a confidential compliance hotline. Investigate all reported concerns and document remedial actions.

Common Questions

Related Resources

• ICD-10 CPT Coding Compliance Rules
• Claim Bundling Compliance Rules
• High-Risk Billing Audit Areas