Week 15/Chapter 16 Reality Check Billing and Reimbursement

For ten years, Juan Garcia has worked as the office manager for Dr. Smith, a local and well-respected osteopath in his community. It was brought to Mr. Garcia’s attention by one of his coders that Dr. Smith appears to be upcoding with some of his services for Tricare patients. Mr. Garcia thought this was impossible as Dr. Smith had a high level of integrity and position of authority in the community. The coder, on the other hand, had coded for four years. She was new and not as savvy to Dr. Smith’s billing practices. Mr. Garcia was not a coder himself, but he did understand some aspects of coding, and especially coding for TRICARE. When his coder brought this to his attention, he brushed her off. Instead of asking her to audit Dr. Smith’s charts, Mr. Garcia decided to hire an outside auditor to review Dr. Smith’s work.

Six months later, Mr. Garcia still hadn’t called in an auditor. Much to his surprise, the Office of Inspector General (OIG) paid a visit to the practice. The OIG removed everything from the premises − records, computers, anything that might prove fraud had occurred with TRICARE billing, and perhaps other billings. This was a very serious situation and Mr. Garcia and Dr. Smith were in a lot of trouble.

The next week, the coder resigned from her position and moved to another state to start working at another office.

At what point did Mr. Garcia need to do something about the potential allegations against Dr. Smith?

Were the actions of the coder right or wrong?

What would you have done in this situation?

For full credit these three questions must be answered in detail with supporting evidence (or insightful thoughts).

Expert Solution Preview


In the given scenario, a medical office manager has been made aware of potential fraud in billing practices by a new coder for TRICARE patients. The office manager chooses to ignore the allegations and delay hiring an outside auditor. The Office of Inspector General eventually investigates the practice and confiscates all records. The following questions must be addressed in detail with supporting evidence or thoughtful insights.


1. At what point did the office manager need to do something about the potential allegations against Dr. Smith?

The office manager should have taken action as soon as the coder informed him of potential upcoding. The manager’s prior knowledge of coding, coupled with the compliance policies of TRICARE, should have prompted him to investigate and possibly even audit Dr. Smith’s billing practices. Waiting six months to act on the potential fraud allegations suggests a lack of accountability and disregard for regulatory compliance policies.

2. Were the actions of the coder right or wrong?

The coder’s actions were right. As a newly hired employee, she may have been more keen to notice irregularities or potential fraud in the billing practices. Bringing up her concerns to the office manager was the right thing to do, and it was his responsibility to investigate the allegations further. However, it is understandable that the coder chose to resign and relocate to another state after no action was taken and the practice was investigated by the OIG.

3. What would you have done in this situation?

As a medical professor with knowledge of healthcare compliance, I would have immediately reviewed the practice’s billing practices and records upon learning of potential upcoding. I would have also consulted with an outside auditor to thoroughly audit the practice’s billing practices to ensure compliance with TRICARE policies and other regulatory agencies. Additionally, it is important to maintain a culture of ethical behavior and integrity in the workplace, and any allegations of fraud or compliance violations should be taken seriously and investigated immediately.

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