Providers also might restrict the menus on their EHR software to show only diagnoses and treatment codes with the highest reimbursement rates. Doctors must document the care that they provide to patients and then bill for the procedure using standard billing codes that represent a particular service or procedure. Doctors, including primary care doctors as well as specialty doctors such as psychiatrists, ophthalmologists, dermatologists, orthopedists, pain management doctors, wound care doctors and others , engage in upcoding when they use codes to reflect more expensive services than the ones they actually provided.
For example, doctors may use a code to indicate that they performed a complex procedure, when they only performed a routine one.
Another type of upcoding is to bill for a visit that involved more time than it actually did. Doctors also may use certain modifier codes that show that distinct additional services were provided during a patient visit.
A common type of upcoding is to use a modifier code to indicate that additional services were provided when those services are actually covered by the standard code for the patient visit. Hospitals also can engage in upcoding lower-level charges for better-paying ones. Hospital inpatient costs are paid using pre-determined rates that vary according to the diagnosis-related group DRG assigned to the type of patient stay and the severity of the diagnosis.
A high severity level requires that there be at least one secondary diagnosis that is considered a major complication or comorbidity, such as acute respiratory failure and sepsis. Billing care at higher levels than the care provided results in significant overcharges to federal healthcare programs. Upcoding is a type of fraud where healthcare providers submit inaccurate billing codes to insurance companies in order to receive inflated reimbursements.
There are nearly 7, CPT codes used by healthcare providers. Collectively, these codes represent all of the procedures, conditions, and drugs that are currently reimbursable by the health insurance industry.
Each one of them has an associated cost for individuals and insurance companies, based upon the urgency of the issue and the complexity of the decision-making required of the healthcare provider. Medicaid and Medicare reimburse providers based on this system. For example, a five-minute consultation with a nurse for a minor medical question would receive a different, less expensive CPT than the one for a full examination by a doctor lasting minutes. However, if the physician charges the federal programs for the more expensive minute examination when the five-minute consultation is what actually occurred, this would constitute upcoding.
Unbundling is another common form of upcoding. This fraudulent scheme involves billing for individual procedures that are usually performed and billed together under a single CPT code. In some cases, the billing codes for complicated medical operations have associated components built into their CPTs. Upcoding is fraudulent medical billing in which a bill sent for a health service is more expensive than it should have been based on the service that was performed.
A upcoded bill can be sent to any payer—whether a private health insurer, Medicaid , Medicare , or the patient. While it is not the norm by any means, upcoding can occur when you receive diagnostic services, medical procedures, or visit your healthcare provider.
The consequence of upcoding is an increased cost of health care for everyone because the government and private payers distribute the cost of healthcare among everyone. When your hospital sends a bill to your payer, that CPT code corresponds to the procedure, and different procedures and services have higher or lower costs.
While the code doesn't directly translate to the payment, the hospital payment should be accurate as long as the bill contains the correct code. When a hospital upcodes, this means that the billers assign a code for a more expensive service or procedure than the one that was performed. For example, a simple X-ray may be billed as a more complex X-ray, including more views than those that were actually done.
Sedation may be billed as more complex anesthesia, or a procedure that was done by an assistant or nurse may be billed as if it was done by the doctor. Upcoding is illegal, but there are hospitals and healthcare providers who have been caught doing it.
Administrators who run healthcare systems can benefit professionally when their profits are impressive, and upcoding is one way to make that happen by cheating the system. Some medical practices fraudulently upcode, reaping hundreds of thousands, or even millions of dollars. Sometimes, doctors, nurses, and advanced practice providers who are employed are unaware that their own services are being upcoded if malicious employers are secretive about billing.
The most substantial effect of upcoding is the increased cost to health payers—which they pass on to consumers. When government payers end up paying excessive dollars for health care, this is reflected in taxes and in governments budgets. When health insurance companies overpay, they increase the cost of healthcare premiums to consumers as a way to offset the monetary loss.
If you are concerned that the hospital where you receive your medical care is guilty of upcoding, there are some steps you can take to make sure your payer has not been billed fraudulently. You can start by checking your Estimate of Benefits EOB to see what services your health payer is being billed for and if they match up to the services you remember receiving. If you think there is a problem with your bill, you can take action:. Unfortunately, hospitals, healthcare providers, and diagnostic facilities have been caught upcoding.
This can result in the firing of administrators or even jail time. Often, however, those who are most skilled at these types of illegal activities are able to hide behind systemic malfunctions or bureaucracy to avoid being blamed for the problems. Sign up for our Health Tip of the Day newsletter, and receive daily tips that will help you live your healthiest life.
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