How To Prevent Your Practice From Pass-Through Billing?_ Learn To Earn Your Right!

Pass-Through Billing

Pass-Through Billing

It is the most frequently asked question in the healthcare industry_ how to avoid pass-through billing practice? Sometimes, physicians fail to earn their deserved earnings due to pass-through billing, which is controversial.

Such practices are considered illegal and unethical. Since it holds healthcare providers to receive reimbursement for the services they have furnished. More often, fraud medical billers prefer to request medical claims for a service that is not performed by the physician.

In return, it impacts the payer-provider relationship negatively. According to a study published by the JAMA Network, physicians lose almost  $58.5 to $83.9 billion every year.

Therefore, it is important to adopt preventive measures in advance so that you do not get caught in this trap.

Before learning further details, first, learn about the difference between pass-through billing and what is not.

Pass-Through Billing:

Healthcare professionals who charge for additional medical services that they have actually not performed_ then it is called pass-through billing. Mostly, healthcare providers practice such things in order to increase their markup costs.

The American Medical Association has declared such practices as a crime. Apart from this practice, it also thrusts an additional burden on the healthcare facility.

It also increases the conflicts of providers with insurance payers as mentioned earlier.

Although, if an independent medical contractor charges for medical services then it is basically engaged in this illegal act.

Now, that we have a clear definition of pass-through billing. So we should learn about certain preventive measures to avoid such illegal billing practices.

1. Focus On Rural Healthcare Facilities:

Most frequently, pass-through billing practices are observed in rural healthcare facilities. Because such facilities don’t have the opportunity to produce much revenue. Therefore, mostly small medical businesses (even in urban areas)  participate in fraudulent billing schemes.

Their objective is to increase their revenue with lesser sources. So they start to file medical claims for the services that they have actually not furnished.

Therefore, in order to lower down such practices in rural areas and small medical practices. The US government should increase incentives for such healthcare providers.

In this way, they won’t find the need to indulge in such practices. Moreover, if physicians are not sure about their billing staff then they should consult with an offshore medical billing service provider.

With an external medical audit, they will be better able to get actual analytics about their revenue cycle management.

2. Prepare Compliance Program:

Hence, it has become a growing problem in the US healthcare system. But don’t worry! You can prepare a compliance program to develop a strategy that can hold your practice back from such illegal practices.

Although, it is not essential to only follow the compliance programs recommended by the Centers for Medicare and Medicaid Services (CMS). But it helps to reduce the threats of unlawful medical billing practices.

With such programs, physicians will be able to submit error-free claims and decrease the number of claim denials. Thus it increases the credibility of your work.

Therefore, physicians should learn and adopt compliance programs. If you have an in-house billing department then you should also educate your staff about the updates in compliance guidelines.

You should upgrade your billing and coding software for high-level maintenance of your revenue cycle management system.

In addition to this, you should also follow the guidelines defined by the Officer of Inspector General (OIG). OIG addresses the frauds and issues in Medicare, Medicaid, and other federal healthcare guidelines.

By complying with the rules and regulations of OIG, you can avoid revenue collection problems i.e. pass-through billing. For this purpose, you should focus on preparing correct documentation.

3. Ensure Accurate Medical Coding:

Having a discussion about accurate documentation. Physicians should pay attention to their revenue cycle management from the initial stage i.e. Information collection.

If you can successfully capture accurate information. Then you will be able to apply the right medical codes on the final step i.e. preparation of medical claims.

Mix-ups in medical coding can also lead your medical claims to a fraud billing process. Not only you should use correct medical codes but also the most up-to-date ones.

It is essential that you properly mention an unlisted cost of every service provided. Also, use a single code for injection for a single session instead of using a single code multiple times.

If you would not avoid using a single code more than one time then it would result in upcoding. Upcoding is the most common form of fraud in medical billing services.

What Is Upcoding?

It is the process of filing claims of such medical services that are more expensive than the actual services furnished on that day.

There are times when billers can proceed with upcoding without getting caught by clearinghouses. But once they recognize it, then a practitioner has to face serious consequences.

4. Follow The National Correct Coding Initiative (NCCI):

You can also avoid mix-ups coding by following the National Correct Coding Initiative (NCCI) policies. It will help you to use accurate medical codes and properly report medical payment.


Anything that complies with the definition of pass-through billing is illegal and unethical. Federal interrogative bodies can take legal actions to penalize such practices.

Sometimes, it becomes very difficult for physicians to discriminate pass-through billing practice and medical claims for actual services.

If you would feel any doubt, then you should consult with a medical attorney. Also, if you want to stay safe from pass-through billing then you should ensure compliance with federal programs.

Moreover, train your staff to adopt up-to-date rules and regulations for medical billing services.

Stay tuned with more such updates about the healthcare industry. Medical Billing Benefits is an all-inclusive healthcare newswire that distributes the most authentic news about the medical field. Subscribe our Enewsletter to get the latest updates and news immediately.

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