Billing fraud is a broad general term that describes a number of dishonest, deceptive billing practices designed to enrich the biller and cheat the organization being billed. Billing fraud can be as simple as charging for unauthorized expenses and tacking on hidden fees to as complex as false advertising and bait and switch schemes.  The victims of billing fraud can range from every day people to organizations as large as the U.S. government, and the perpetrators can be just as diverse. Class action lawsuits have been pursued against major corporations for billing fraud perpetrated on their customers and against small medical practices for billing fraud committed against Medicare.

There are a number of types of fraudulent billing practices, including:

  • Unauthorized charges
  • Deceptive charges
  • Hidden fees
  • Double charging

Billing fraud violates both federal and state laws, some of which are established to protect consumers from fraud and others that are designed to protect the government. The laws that protect consumers include the Communications Act of 1934, the Truth in Lending Act, the Fair Credit Billing Act, the Fair Credit Reporting Act and the Fair Debt Collection Practices Act.

The primary law that protects the federal government from billing fraud is the False Claims Act, which helps the government recover funds and encourages witnesses to the crimes to report them. Government-targeted billing fraud includes improper billing that involves payment of any federal funds, including those submitted to the military, to the healthcare system, or to any other government agency. The False Claims Act not only outlines the penalties for these illegal acts, but also provides protections for those who report fraud and help the government to recover lost funds on behalf of the American taxpayer.

Fraud against the government can take many forms. Defense contractors can overbill the government for inferior products, for products that are not the quality or quantity promised, or by billing for information or services provided by less qualified professionals than actually performed the job.

Healthcare fraud is one of the most common types of billing fraud perpetrated in the United States, with Medicare, Medicaid and TRICARE frequently being targeted by unethical companies. This fraud may include billing for brand-name medications while actually delivering lower-cost generics, double billing both Medicare and a private insurer, or falsifying patient records.

Other types of billing fraud may be represented by companies promising to provide services to the government and billing for more hours than the work actually took, or using funds allocated for a grant for expenses that fall outside of the grant’s descriptions.

Those who become aware of this type of billing fraud are able to file whistleblower complaints against those who are committing this type of crime, and if they are successful in pursuing their lawsuits they can receive rewards of between fifteen percent and thirty percent of the amount that the government recovers. They are also entitled to protection from retaliation by those that they turn in. For more information about the correct actions to take if you are aware of billing fraud, contact the Philadelphia law firm of Bochetto & Lentz.

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