How to Avoid Pass-Through Billing Traps

There are several reasons that pass-through billing is illegal and against the law, and are easy to catch. It is often problematic because healthcare providers are used to pay-through billing. The idea that medical professionals or their employees charge for a service they do not have is understood as unethical and illegal by bills. By assigning a service that the billing provider fails to perform, this activity is corrupt; it raises its profits.

Research by the JAMA Network indicates that some $58.5 to $83.9 billion is being spent because of medical fraud or abuse and neglect and that this raises the overall cost of healthcare. Pass-through billing can have a significant effect, which is why you need to take precautionary steps to avoid getting caught in this trap.

What is called a pass-through billing and what is not, is necessary to distinguish

According to the American Medical Association, health practitioners charging for ancillary services primarily to raise their billing costs. In addition to being ethically illegal, the health care system often has an added burden and runs contrary to the insurance laws and rules. A medical clinic virtually pays this illicit act for specific services rendered by an independent medical contractor. With pass-through billing now well described and how it can affect billing business, it is time to learn some steps to avoid the trapping.

Pass-through billing is primarily done in rural health facilities since they produce little profits. They are engaging in fraudulent billing schemes to raise their earnings by demanding credit for non-provided services.

There is a growing problem in the U.S, but by developing a compliance program, you can easily avoid passing billing traps. Although the Centers for Medicare and Medicaid Services (CMS) do not need to follow the Compliance Program recommended, this program’s execution reduces the threats to unlawful billing. An actual compliance program can help deduct any medical coding or accounting errors and lower your risk of penalties. It also makes your work more credible. A robust medical billing infrastructure compliant with the APC can increase your payment, and your in-house billing supports’ reliability and accuracy. Therefore, medical providers are highly recommended to invest in training and maintaining their staff and resources.

One way to remove a billing trap is to know the rules and regulations defined by the Office of inspector general (OIG).

  • In Medicare, Medicaid and other federal health programs, the OIG deals with illegal billing issues and fraud. You can avoid taking unfair billing practices entirely by being aware of the rules of the OIGs. You can make sure that you work within the laws and regulations laid down by OIGs, by focusing on appropriate medical coding, documentation and other medical practices.
  • Medical coding can also lead to the identifying of fraud in your practice. It is essential, therefore, to take measures to check your health services accurately. Keep precise and timely code documentation, so that the services you provide can be correctly billed without mixing them.


  • Rather than multiple coding, it is essential to document an unlisted cost properly and use a single injection code for a single session.
  • The upcoding of medical coding is another ethical practice. Upcoding means a patient is charged for a few minutes for a meeting. The authorities concerned can easily ignore up coding sometimes, but serious consequences can arise when caught.


Another thing to remember is that the National Correct Coding Initiative (NCCI) rules are followed in reporting medical codes to avoid coding mixes that may lead to medical billing abuse. That helps to report medical payments properly using appropriate and reliable methods of coding. It’s illegal and unethical to remember pass-through billing. You can get caught easily and face serious allegations. It’s sometimes difficult, and similar and unethical to you, to distinguish between medical  practice and other in house billing and external services.


If you have any doubts, it is always a better choice to consult a medical attorney. Also, you need to train and familiarize your employees with medical regulations to avoid pass-through traps.

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