Is it illegal for company to doctor a bill to make it look like they are paying more to a third party vendor in order to bill more from a client?

The answer is "is depends." There is no law that prevents a business from marking up -- i.e., making a profit on -- its costs in order to earn a living. That is called capitalism. On the other hand, deceiving a customer about what its costs are, under circumstances where the customer believes that costs are simply being passed through without markup, is fraud. It makes a huge difference what the customer's expectations are. Simply being charged more than the seller's cost is not only lawful but also the American way.