how to avoid pass through billing traps

How To Avoid Pass-Through Billing Traps In Your Medical Practice

Pass-through billing is an illegal and unethical activity in which a healthcare provider requests a bill for a service that he didn’t provide to the patient. The American Medical Association declared Pass-through Billing a crime. The faulty claim by the service provider can damage the reputation of his institution which may spread trust issues between the payer and provider. Besides this, it also violates many laws and orders devised by the Federal Government and States. Before figure out the possible solutions to avoid Pass-Through Billing. Let’s have a quick check what the Federal Government laws said about Fraudulent billing practices.

So, in this article we are going to discuss about how to avoid pass through billing traps.

False Claim Act (FCA): 

The false claim act is the law that protects the Federal Government from a false claim by health service providers. It penalized the claimer with the amount of nearly $11,000 with 3 times the amount the Government paid for their false claim. Besides Federal law, there are other laws made by the states, Like the Michigan Medical False Claim Act (MMFCA) which punishes imprisonment with a fine of nearly $50,000. It is noteworthy that violation of this act not only requires an intention to involve in fraudulent activities but a deliberate ignorance also counts in it. 

Anti-Kickback Statute: 

It mainly focuses on the referrals of services that are paid by the Federal Healthcare programs. Which include medical supplies and drugs. It is considered an illegal activity. Unlawful charges like imprisonment with an estimated fine of $50,000 are imposed on whoever is involved in the violation. 

Stark Law: 

Stark Law is very much clear as compared to Anti-kickback status. So, Stark law refers to a condition in which a Physician refers the Medicare or Medicaid patient to the bodies in which he has a financial relationship. Violation of the law doesn’t require any intention as the physician is well aware of referring and he can easily avoid it. Since the violation of this law is considered as the false claim act. Criminal charges include fines and exclusion from the health care system imposed. These were some Acts by the Federal Government to stop this illegal activity of Pass-Through billing. Through these acts, the federal Government ensured to minimize these fraudulent claims as much as possible. 

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These tips will help you to find answer of how to avoid pass through billing traps.

Steps to avoid Pass-Through Billing:

There are a few things that you need to follow to avoid Pass-Through billing.

Compliance Program: 

It is the duty of the Officer of Inspector General to deal with the deceitful activities in Medicare and Medicaid or other federally supported health care Programs. The way to avoid pass-through billing is to follow the rules of the Officer of Inspector General. In combating the fraudulent claims, the Office of Inspector General devised strategies while working with the healthcare community. It gave clear guidance to the institutions which are interested in eliminating this illegal activity. Basically, Compliance is a dynamic process that helps bill companies to be better able to perform the billing process and ensure transparency and fulfill the expectations of Congress and private insurance companies. OIG is expected that this voluntarily created Compliance program can help to reduce fraudulent activities. 

Focused on Healthcare centers in rural areas: 

Pass-through billing is most frequently practiced by healthcare organizations that are located in rural areas. Those centers have less opportunity to generate a large amount of revenue. So, they adopt that illegal way to generate revenue. The U.S Government should take a close look at these health care centers’ activities and build some incentives so that they avoid fraudulent activities. Some health service providers in rural areas are facing the problem of not being able to claim properly due to some error in data. In that case, a rural health care service provider should take services from billing companies. Which ensures a smooth and error-free billing process for them.

This is how to avoid pass through billing traps.

Ensure accurate coding: 

Coding errors are one of the most popular reasons behind Pass-through billing. The probability of false claiming is very high in this situation. Proper coding helps to receive a successful claim. A dispute between the payer and provider may occur if the claim is submitted with improper coding. There might be several coding errors like multiple coding. Which involves using multiple codes to describe a specific set of treatment procedures and diagnostic statements. To avoid multiple coding there must be a use of a single code for a single session.

Improper coding sometimes results in false claiming or upcoding. An upcoding is the activity in which a service provider passes the CPT code to the payer for the more expensive treatment process. Which actually didn’t perform. Coding Mixes could be the reason for medical billing abuse. Following the National correct coding initiative (NCCI) rules helps you to avoid coding mix-ups, this helps you to manage reliable coding methods. To ensure transparency in this matter a more professional team that has experience in managing the billing activity by generating codes, so a third party can help in reducing these activities. 

Invest in training of the Staff: 

There are very strict laws against fraudulent billing activities. It has been observed that many of the cases occur due to some human error if the false claim is not intentional. So it’s good for a health care system to organize a proper training session for the team who is managing the billing activities. Because these activities can cost a lot if not handled properly.

This is also how to avoid pass through billing traps.

Outsource your billing: 

If you want to avoid pass-through billing activity. It’s the best option to hire a professional team that will manage your billing activity. 

The Medicator’s has a team of professionals with experience of 8 long years in helping the health care provider to manage a better revenue cycle with the help of advanced software. Ensuring no coding errors which result in no false claims, and making the billing process smoother. Our goal is to make the revenue cycle more efficient for our clients.

Need more Information? Call us at (888) 277-1460 Or Email at

Hope you have find your all questions about how to avoid pass through billing traps.

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