What is Upcoding?

Tell us if this sounds familiar to you as a patient: You went to your healthcare specialist for a regular checkup. At the end of the month, you’re given a bill for unpaid services that seem a little extravagant for a normal office visit to your doctor. If this has happened to you, you may have been the victim of upcoding–but what is upcoding?

As someone who runs a healthcare practice, upcoding is a dangerous practice that could lead to some significant penalties. We’re not suggesting this is a practice you actively engage in, but if your medical coder/biller is consistently entering incorrect codes, it would have the same effect on your practice. That’s why it is so important to have someone who knows what they are doing in that position.

What is Upcoding and Why is it Bad?

Upcoding occurs when medical coders fraudulently charge medical bills. It is a criminal act that can cost patients and insurance companies thousands of dollars with every procedure. How it works is the supplier bills a health care coverage payer (regardless of whether private, Medicaid, or Medicare) using a CPT code for a more costly service than what was performed on the patient.

It’s like being charged for a new transmission when you go in for an oil change.

The motive behind upcoding could be to get more money from insurance companies or federal government health care programs by making it seem like they did more than they actually did. Healthcare providers should bill for the services they genuinely provide, matching them accurately to the treatment or care given.

When providers engage in upcoding, it can lead to higher reimbursement amounts and inflated healthcare costs, impacting patients, insurance companies, and even the healthcare system as a whole.

To prevent upcoding, there are systems and checks in place, like audits and coding guidelines, to ensure that billing accurately reflects the care provided. It’s essential for healthcare professionals to follow ethical billing practices and bill for the services that align with what was actually done for the patient.

How Upcoding Works

Every surgery or procedure performed by a medical professional has a code attached to it. This code, called the CPT code (Current Procedural Terminology), allows them to bill Medicare, Medicaid, insurance, or even the patients themselves. These codes are entered into electronic health records (EHRs), digital versions of patients’ paper charts that make it easier to scan the medical history of your patients.

At the point when any medical professional sends a code to the patient or their insurance, the CPT code decides the amount the patient or insurance will be charged and the amount the doctor will be paid. Each code relates to a different procedure with a higher or lower price tag.

For whatever length of time that the doctor utilizes the right code, the doctor is paid according to the type of procedure performed. With upcoding, the CPT code used will be one for a procedure that is more costly than what was actually performed.

The False Claims Act
The False Claims Act (FCA) is a federal law aimed at combating fraud against government programs, including Medicare or Medicaid. Upcoding is viewed as a violation of the FCA because it results in financial loss to government-funded programs.

Instances of upcoding can trigger FCA investigations, potentially leading to severe penalties, including hefty fines and exclusion from participation in federal healthcare programs. The FCA acts as a safeguard, ensuring that healthcare billing remains accurate and transparent, maintaining the integrity of government-funded healthcare services.

How Does It Affect My Practice

Upcoding can severely impact your healthcare practice, tarnishing its reputation and causing legal, financial, and ethical repercussions. When upcoding occurs within a practice, it jeopardizes the trust and confidence patients have in the facility and its practitioners.

First and foremost, upcoding can lead to legal consequences. Healthcare fraud, including upcoding, is illegal and can result in hefty fines, legal actions, and even criminal charges. These legal repercussions stain the practice’s reputation and can lead to substantial financial penalties.

Upcoding may initially seem beneficial as it generates higher revenues–but it’s short-lived and unsustainable. Insurance companies might flag the practice, leading to increased scrutiny, delayed payments, or outright denials of legitimate claims, impacting your ability to provide care for your patients who rely on insurance.

The practice undermines the principles of patient care and professionalism. It compromises the integrity of your practice and the healthcare profession as a whole. Patients expect accurate billing that reflects the services provided, and upcoding breaches this trust, damaging the relationship between patients and practitioners.

Additionally, upcoding impacts the overall healthcare system by contributing to inflated healthcare costs. It diverts resources away from genuine patient care, affecting the allocation of funds and resources within the healthcare industry.

Healthcare practices must prioritize ethical billing practices, ensuring that all services billed align accurately with the care provided. Implementing robust compliance programs, conducting regular audits, and providing proper training to staff on billing and coding ethics can safeguard the practice from the pitfalls of upcoding.

The Truth about Upcoding

Upcoding is most certainly illegal, but that doesn’t stop people from trying to find ways to take advantage of the system. Providers that are attempting to cheat the system will use upcoding to pad their receivables beyond what they are rightly due from payers.

Upcoding in healthcare may seem like a small billing trick, but its consequences can significantly harm patients. When healthcare providers upcode, they charge for services or treatments more expensive than those actually given. This deceitful practice impacts patients in several ways, creating a ripple effect of misinformation.

Firstly, upcoding can result in higher out-of-pocket expenses for patients. When billed for more expensive procedures or services, patients may end up paying higher deductibles or copays, causing financial strain and burden.

Moreover, upcoding can misrepresent a patient’s medical history or conditions. If inaccurate treatments are documented due to upcoding, it could lead to incorrect assessments or future medically unnecessary treatments, potentially compromising the patient’s health.

Additionally, upcoding might divert resources away from actual needed services. When funds are allocated based on false or inflated billing, it can reduce access to necessary treatments or affect the quality of care available to patients who need it.

Overall, upcoding harms patients by causing financial strain, potentially misleading medical records, reducing access to needed treatments, and disrupting the reimbursement process. It erodes trust between patients and healthcare providers, impacting the quality and integrity of healthcare delivery.

How Can I Spot It?

As a patient, there are ways to spot potential upcoding in healthcare billing. Reviewing your medical bills carefully is crucial. Look for discrepancies between the services documented and the actual care received. If you notice unfamiliar or excessive charges or services that don’t align with your treatment, it could indicate upcoding.

Requesting an itemized bill allows a detailed examination of each charge, aiding in identifying any irregularities. Additionally, compare the billing details with the explanation of benefits from your insurance company for inconsistencies. If something seems off or unclear, don’t hesitate to ask your healthcare provider or insurance company for clarification.

Being vigilant and attentive to your medical bills can help uncover any potential upcoding, ensuring accurate billing and protecting yourself from unnecessary financial burdens. As a medical professional, it’s up to you to make sure your practice is billing patients or insurance companies correctly.

Now You Know What Upcoding Is, How Can You Stop It?

Understanding upcoding helps ensure fairness and honesty in healthcare billing, ensuring patients receive proper care without unfair financial burdens. Upcoding is unfortunately a very real problem. The best way to avoid this is to carefully choose which medical professionals you interact with and keep your eye on the costs of your procedures.

Ensuring accurate coding through stringent checks and ethical billing practices is essential to safeguard patients’ well-being and ensure fair and accurate healthcare services. If you are interested in outsourcing your medical billing, you need to work with a billing company you can trust. Always be sure to vet them first and to ask the right questions.

MBA Medical Billing is a specialized service provider in healthcare revenue cycle management, helping prevent upcoding by employing professionals well-versed in coding guidelines and regulations. We ensure adherence to accurate coding standards, reducing the likelihood of unintentional upcoding due to coding errors.

We also offer training on proper coding practices and documentation requirements to help prevent upcoding errors. By improving understanding and awareness, you’ll reduce the risk of unintentional upcoding due to misunderstandings or inattentiveness. This includes comprehensive training on advanced billing software and systems that incorporate coding compliance checks. Reach out today to see how we can help with your medical coding and billing procedures.