Is a Lack of Understanding of Billing Procedures Fraud?

Question continued: A dental plan in which we have always participated recently sent me a notice denying payment on several claims and requesting a refund of past payments. It claims that incorrect procedure codes were used in some cases and that, in other cases, claims were submitted before treatment was completed.

No one has ever formally taught me which codes to use, so I simply followed the billing practices established by the previous owner. Because many of my treatment plans take several weeks to complete, I also followed the office’s long-standing approach to billing. I admit that I have not carefully studied my participation agreement or reviewed the dental plan’s billing polocies.

The dental plan’s representative keeps telling me that I committed fraud. He says the matter could be reported to the Board of Dentistry and may even constitute a crime.

I understand that I may have misunderstood the plan’s billing requirements and that I may have made mistakes by following the office’s previous practices. But does that make my actions fraud?

Answer: No. A lack of understanding of a dental plan’s billing requirements, by itself, does not constitute fraud. To prove fraud, the dental plan would have to establish not only that you used incorrect prodecure codes, submitted claims prematurely or otherwise billed improperly, but also that:

1. You knew your actions violated your participation agreement or an applicable billing policy.
2. You intended the dental plan to rely on the false or misleading information when processing your claim.
3. The dental plan suffered damages by paying more that it should have as a result.

You clearly intended the dental plan to rely on the procedure codes you submitted. Likewise, the fact that it is seeking a refund suggests it believed it paid more than it should have because of the codes that were used.

The timing issue is less clear. If the dental plan ultimately would have paid the claim once treatment was completed, it may be difficult to show that submitting the claim early caused any actual damages. While submitting a claim prematurely may constitute a breach of your participation agreement, a breach of contract alone does not establish fraud.

The dental plan should not accuse you of fraud unless it has evidence that you knowingly submitted claims before treatment was complete.

Based on the facts you have described, proving knowledge and intent would likely be difficult. Nothing in your question suggests conduct that would ordinarily be considered criminal.

Going forward, you should carefully review all of your participation agreements, as well as those used by any dentist partners or associated in your practice. If the agreements differ among plans, it is important to understand each plan’s specific requirements, including any billing policies incorporated by reference. Understanding these agreements is essential. While a lack of knowledge or intent may be a defense to a fraud claim, it is not a defense to a breach of contract claim. It would benefit both dentists and dental plans if plans provided better education about their billing policies and procedures, particularly for dentists who are new to practice or new to the plan. Likewise, it would be helpful if auditors were trained to recognize that not every overpayment constitutes fraud. Unfortunately, that is not always the case.

This article originally appeared in the August 2026 edition of the Journal of the Michigan Dental Association.