Upcoding claims can expose pharmacists to fines, criminal charges and license action. These claims may arise when billing codes do not match the services in patient records. Knowing how these claims start and what may follow can help explain the risks pharmacists face.
How upcoding allegations typically arise
Federal auditors compare submitted claims against patient records to find billing gaps. When billing codes show higher-cost services without supporting records, federal agents may suspect fraud. High billing patterns can trigger a review even when individual claims appear valid.
Current or former employee complaints are a common trigger under the False Claims Act’s qui tam provisions. These provisions allow private parties with direct knowledge to file lawsuits on behalf of the United States. Pharmacies using automated billing systems may face allegations if software defaults to higher billing tiers without oversight.
Legal consequences pharmacists face
The False Claims Act allows the government to seek three times its losses, plus a penalty for each false claim. These penalties are adjusted for inflation. A conviction under 18 U.S.C. § 1347 may also bring up to 10 years in prison, or up to 20 years if serious bodily injury results. Other consequences include:
- Federal program exclusion: Mandatory exclusion for certain convictions under 42 U.S.C. § 1320a-7(a).
- Permissive exclusion: Other fraud convictions may lead to exclusion under § 1320a-7(b).
- License action: State pharmacy boards may suspend or revoke a license, depending on state law.
These penalties can affect a pharmacist’s finances, federal program status and ability to practice.
How pharmacists can reduce upcoding risk
Pharmacists can take several steps to reduce billing risk:
- Conduct regular internal audits to catch errors before external reviews occur.
- Verify that billing codes match documented services in the clinical record.
- Maintain detailed records of all dispensing activities.
- Train staff on proper coding protocols to minimize billing errors.
Prompt legal consultation is essential when a pharmacist receives an audit notice, civil investigative demand or subpoena. Early involvement gives attorneys the best chance to review records and build a response strategy.
What pharmacists should do when an inquiry begins
Upcoding allegations can lead to treble damages and exclusion from federal health programs. Pharmacists facing a government billing inquiry should seek legal counsel early to protect their license and practice.
