Doctor holding clipboardUpcoding and downcoding are issues that are concerning to medical professionals and patients alike, for various reasons. For those of us who are not familiar with the particulars on this subject, we’ll take a step back and define what all this means.

What it Means

Medical coders assign specific codes, called CPT codes (current procedural terminology), that communicate information about a service or procedure that has been performed by the healthcare provider. If the code that is recorded is for a higher level service or procedure than what is documented in the patient’s chart, this is referred to as upcoding.

Conversely, if the code that is documented is at a lower level of complexity or cost than what is documented, it is called downcoding. The motive for downcoding may also be associated with the intent of avoiding claim denials or audits, but at what cost? In 2008, Medicare reported that medical practices lost up to $236 million due to downcoding.

Compliance Risk

Both upcoding and downcoding can occur by mistake or as a deliberately deceptive practice. While they are distinctly different, both are a serious compliance risk for medical practices and increase healthcare costs for patients.

While the layperson may think that a medical practice downcoding a procedure is only bad for the provider’s bottom line, it is just as bad as upcoding in that it is also not compliant and therefore leaves providers susceptible if an audit is performed.

The National Correct Coding Initiative (NCCI) General Correct Coding Policies clearly address this issue:

“Physicians must avoid downcoding. If a HCPCS/CPT code exists that describes the services performed, the physician must report this code rather than report a less comprehensive code with other codes describing the services not included in the less comprehensive code. For example if a physician performs a unilateral partial mastectomy with axillary lymphadenectomy, the provider should report CPT code 19302 (Mastectomy, partial…, with axillary lymphadenectomy). A physician should not report CPT code 19301 (Mastectomy, partial …) plus CPT code 38745 (Axillary lymphadenectomy; complete).”


While it does accurately reflect the services performed, the physician in this situation wouldn’t want to report code 19301 plus CPT code 38745 (Axillary lymphadenectomy; complete) because a code exists that includes both services when performed together; if reported separately it would be considered unbundling, which comes with its own risks and problems beyond downcoding.

One of the most effective ways to detect and eliminate upcoding and downcoding is to perform periodic internal audits. You may also be better off contracting out your coding needs, since many practices are losing thousands in revenue due to poor coding practices.

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