Phantom Billing Explained Simply:
Learn How this Common Medical Billing Fraud Works

Phantom billing is the act of submitting bills for the payment of services, treatments, procedures or prescription drugs that were never performed or necessary.

This is identified as a specific form of medical fraud and is prosecuted under the False Claims Act (FCA).

Medical practitioners use fraudulent billing to make hundreds of thousands of dollars without any expense because the patients never existed and treatments never occurred.

Phantom invoicing for non-existent treatments is an unethical medical billing practice and is the most common form of fraud because it is so simple to commit.

Phantom or Ghost billing fraud also includes claims for reimbursement of medically unnecessary treatments, drugs, exams or anything medically provided to a patient they had no need for.

This area of billing fraud can be difficult to clearly define as medical providers seek to cure patients ailments using exploratory treatments that will identify the cause of the illness. The false diagnosis is the root cause for the justification of unnecessary treatments.

Medicare coverage defines its coverage limitations using the concept of “reasonable and necessary”. Physicians and patients can utilize this insurance coverage for the diagnosis and treatment of illness as long as it is a justifiable remedy.

The medical services ordered must also be provided in an economically sound manner and only done when necessary.

When these rules are followed no laws have been broken. However, when healthcare professionals intentionally or willfully ignore the rules, an FCA violation for unnecessary billing exists.

Some common examples of unnecessary treatment include:

• Patients who can completely and safely provide transportation themselves are ordered ambulance transportation
• Testing and examining every patient for illnesses or diseases they are not at risk for or so symptoms of
• Foregoing common, less invasive treatment modalities like prescription drugs, for expensive and surgical treatments

In general, the scam involves perfectly healthy patients administered treatment they have no medical reason for receiving.

A perfect example can be found below.

When not involved, unnecessary billing is more difficult for patients and even trained medical staff to figure out because diagnosis and treatment recommendations are trusted to the Doctor.

While this is true, any healthcare professional like pharmaceutical sales representatives, office managers, EMTs and others have all successfully filed claims under the FCA to stop unnecessary medical fraud and get rewarded.