Billing for services not performed or making false statements to federal healthcare programs constitutes fraud. Fraud is distinctly different from abuse which relates to practices resulting in unnecessary costs, a Stark violation linked to physician referrals, and Anti-kickback involving monetary incentives.
The conduct described in the student's question – billing for a lower level of care than is supported in documentation, making false statements to obtain undeserved benefits or payments from a federal healthcare program, or billing for services that were not performed – falls under the legal category of fraud. This type of behavior in the context of federal healthcare programs such as Medicare and Medicaid is illegal and carries penalties.
In contrast, abuse refers to practices that may indirectly result in unnecessary costs to Medicare or Medicaid, but are not fraudulent per se. A Stark violation involves a physician referring a patient to a service where the physician (or an immediate family member) has a financial interest, while an Anti-kickback involves the exchange of anything of value to induce or reward the referral of federal healthcare program business.