Debbie Durand had been a
U.S. Postal Service employee since 2001 when, sometime before 2006, she claimed to have been hurt on the job, injuring her upper back, shoulder, arm and hand. Telling supervisors that she couldn’t work anymore, U.S. Postal Inspectors began investigating her claims after a co-worker said she was working at a Home Depot and was regularly lifting heavy items, contrary to her workers compensation claim. The Postal Service terminated the benefits, and she was assigned a light-duty job; however, six months later, Durand again claimed that she had been injured.
Fraud examiners who work in insurance or health care fraud need to have a working knowledge of the medical billing process, as
ACFE Insights articles have explored previously. Using Debbie Durand’s case, which concluded with her
trial and conviction, this article will review pertinent components of a medical record that fraud examiners should pay attention to when working these types of cases.
The Billing and Coding Eco-subsystem
Health care is often described as an ecosystem of which billing and coding play a key part in obtaining reimbursement from insurers or government health plans. Several coding systems work together to document why a patient was seen, what was done and the amounts to be paid.
International Classification of Diseases (ICD): The World Health Organization tracks data on public health and uses the ICD as the standard for mortality (death) and morbidity (condition or disease) classification. In medical records, diagnosis is often written as “DX.”
The Centers for Disease Control have issued the
ICD-CM (clinical modification), for use as a diagnostic coding system for U.S. providers. First published in 1990, ICD-10 became mandatory in the U.S. in
October 2015. It also greatly expanded the number of codes, which allowed for more specificity.
At the time of Debbie’s stated injury, ICD-9 was being followed. In ICD-9 and previous editions, the diagnoses were typically three-digit codes. She was diagnosed with sciatica (724.3); unspecified back ache (724.5); and neck sprain and strain (847.0). Today, those would likely be identified in ICD-10 as M54.4 (pain with sciatica); M54.9 (backache, postural); and S13.9 (neck sprain).
Current Procedural Terminology (CPT®) Code: This is a five-digit numeric coding system owned and maintained by the American Medical Association (AMA). CPT describes the specific services or procedures performed and are regularly updated. In some cases, CPT codes are replaced; this occurred for
telehealth after the COVID-19 pandemic, when telemedicine and virtual visits became the norm.
According to
medical records that Debbie submitted in her case, she received physical therapy treatment. On a visit in December 2014, she received ultrasound therapy for eight minutes (CPT 97035), therapeutic exercises for 15 minutes (CPT 97110), and manipulative or traction therapy for 30 minutes (CPT 97410). The physical therapist notes that “pt [patient] feels therapy has already been helping her headaches” and is “able to tolerate increased stretching,” This is in stark contrast to a September 2015 report she provided to the Postal Service stating that she cannot even wash dishes and “most days [I am] lying in bed or laying in a recliner.”
Health Care Common Procedure Coding System (HCPCS): Often called “hic-pics”, this code is overseen by the U.S. Department of Health and Human Services, Centers for Medicare and Medicaid Services (CMS). It covers a myriad of products, services and drugs. The CPT is considered part of it and referred to as Level I codes. Level II codes comprise of an alpha-numeric sequence to identify those items not included in the CPT codes, such as dental, home health services, ambulance transport, prescribed drugs or biologics. For example, J0131 is for the injection of acetaminophen, the generic name for Tylenol®.
It also includes durable medical equipment, prosthetics, orthotics and supplies (DMEPOS).
DME has proven to be lucrative for fraudsters, who often target elderly Medicare beneficiaries through telemarketing firms, who neither need nor want the equipment, as this 2026
$46 million fraud case demonstrates.
While the public record did not include any DME in Debbie’s case, it is possible that she was prescribed various equipment. For example, following her back surgery, she may have used a back brace, officially known as
Lumbar Orthotics, which ranges from HCPCS Code L0625 to L0627. She may have also used a bone growth stimulator (E0747 to E0749) to help recover from back surgery; these have also been featured in a number of
False Claims Act cases.
Additional Terms of Importance
Knowing a few additional terms will help examiners navigate these unique records. Within CPT, Evaluation and Management (E/M) codes represent the cognitive work of healthcare called “medical decision-making” or MDM. Unfortunately, these can also be abused and some
E/M codes can be associated with upcoding cases.
Modifiers add important nuance to CPT or HCPCS codes by clarifying circumstances that affect billing, such as when a service is distinct from another performed the same day or when an E/M visit is separate from a procedure. Modifiers allow for higher reimbursement, which can be
a reason to commit fraud — “Modifier 25” is a common one, typically connected with E/M issues.
Other coding terms are essential to piece the puzzle together, such as Place of Service (POS) code that identifies where the care occurred. The Date of Service (DOS) marks the exact day the patient received care, which is another critical piece of information a fraud examiner needs for the investigation or audit.
Fraud, waste and abuse in healthcare are nothing new; indeed, the amount of money is staggering and thus very attractive for fraudsters. Using this brief overview, fraud examiners can now start assessing medical records with more confidence. It is important for Certified Fraud Examiners (CFEs) to continue learning, seeking professional guidance and staying updated on key changes, since this industry is always evolving — and so are the fraudsters.
