How does this fraud works?
Among the various healthcare scams, Location of Procedure fraud happens when a healthcare provider or company provide false information on the claim form they submit to Medicare contractors. In this particular situation, physicians do not correctly identify the place-of-service code when asking for reimbursement for the overhead portion of the procedure. Usually the services are incorrectly coded as they were performed in nonfacility locations in order to forcefully inflate the price and obtain an illegal overpayment.
For example, a Medicare contractor paid a doctor $2,000 for performing a physical therapy session coded as though it had been performed at the doctor’s office. However, the doctor had actually performed this procedure inside a large hospital that the federal contractor had already reimbursed for the running cost of the facility. If the healthcare provider had coded the claim correctly, he would have received a payment of $600, which does not include overhead costs. The resulting overpayment then amounts to $1,400.