If you work in the health care industry at a doctor’s office, a clinic or even a hospital – you may have come across some billing practices that seem a little sketchy to you – even if you aren’t exactly sure what you are seeing.
One of the most common ways that medical providers game the Medicare reimbursement system is through a practice known as “unbundling” or fragmentation.
Breaking up the bill leads to bigger profits
Unbundling is when a provider takes a group of related medical services that are supposed to be billed together and instead breaks them apart and bills each one separately. Unbundling isn’t just a technical error or a difference in billing style. It’s fraud because it misrepresents what was actually done and how it was supposed to be billed under Medicare rules. It’s a way of illegally inflating charges.
Let’s say a patient comes in for a routine surgery. Medicare expects to be billed one flat rate that includes everything: the prep, anesthesia, procedure and aftercare. That’s how the billing code is designed — one bundled payment.
But when a provider unbundles, they bill each part separately, even though they’re part of the same procedure. Why? Because it usually means they get paid more. It’s like if a restaurant offers a “value meal deal” and then charges separately for every single item — the burger, the bun, the fries and the drink. The costs add up fast – and Medicare ends up paying more.
This frequently happens with lab tests, imaging, radiology and even surgical procedures. Sometimes providers claim there’s a good reason for unbundling — and in rare cases, there might be. But if there’s no clear medical justification for unbundling and it’s happening often, it’s probably fraud. Under the False Claims Act, knowingly submitting false or misleading claims to the government is illegal.
If you’re considering reporting an employer for Medicare fraud, you are entitled to legal protections – and you may even be eligible for a financial reward if the government recovers some money. However, timing matters – and so does the way that the claim is brought forward. It’s wisest to obtain experienced legal guidance from someone who understands whistleblower law, Medicare fraud and the False Claims Act before you make any other moves.