MEDICAL BILLING: Down and Up Coding?

By Staff Reporters




Upcoding is a type of fraud where healthcare providers submit inaccurate billing codes to insurance companies in order to receive inflated reimbursements. These false “current procedural technology” (CPT) submissions indicate that doctors provided patients with treatments that were more complex, costly, and time-consuming than what they actually received. This unlawful scheme is a violation of the False Claims Act (FCA) because it defrauds federal programs including Medicare, Medicaid, and Tricare.



There are nearly 7,800 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 45-minutes. However, if the physician charges the federal programs for the more expensive 45-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. For example, a hip replacement surgery may factor in the costs of the surgeon’s as well as the use of the operating room. Unbundling occurs when a healthcare provider submits each component within a CPT to Medicare or Medicaid separately. This creates a cost redundancy where wrongdoers can unlawfully seek reimbursement for the same procedure several times over.


What Is Downcoding?

Downcoding is the opposite of upcoding. If you perform a service but record the CPT for a lower-level service, that is downcoding. Downcoding also leaves you vulnerable to an audit, which is never good. But, it can also cost a practice thousands of dollars a year in lost revenue because you’re not getting the higher rate of pay that you would if you had recorded the service properly.

According to the National Correct Coding Initiative (NCCI): “Physicians must avoid downcoding. If an 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.”





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2 Responses

  1. CMS Finalizes 4.5% Physician Pay Cut

    Medicare’s physician fee schedule final rule, released Nov. 1, will reduce the physician pay conversion factor by 4.48 percent to $33.06. The conversion factor used to calculate physician reimbursement will decline by $1.55 in 2023. With the 4 percent statutory Pay-As-You-Go sequester, which was implemented to offset congressional spending outside of healthcare, physicians are looking at an 8.5 percent pay cut.

    CMS said the conversion factor accounts for the expiration of the 3 percent supplemental increase in physician fee schedule payments for 2022, as required by the Protecting Medicare and American Farmers From Sequester Cuts Act, and the budget neutrality adjustment for changes in relative value units.

    Source: Becker’s ASC Review [11/3/22]

    Liked by 1 person

  2. Doctor Groups Turn up Heat on Congress to Halt 2023 Pay Cuts

    The Centers for Medicare & Medicaid Services (CMS) finalized the cut in its Physician Fee Schedule rule released Tuesday. Groups afterward implored lawmakers to act in an end-of-the-year spending package that must be passed by Dec. 16. CMS was required to install the cut under budget neutrality rules, leaving groups to turn to lawmakers for help. Congress has previously stepped in to stave off Medicare cuts, and there is a bipartisan bill in the House to do just that.

    Groups are also hoping to get a delay to a 4% decrease to payments as part of the PAYGO law, which mandates cuts if federal spending reaches a certain threshold. Physicians say the cuts come amid lingering financial challenges. Physician groups are hoping for a long-term fix that won’t require them going to Congress to get rid of any cuts. “This annual brinksmanship with Medicare payments is not sustainable and does not support better care for patients,” said Jerry Penso, MD, president and CEO of AMGA, in a statement.

    Source: Fierce Healthcare [11/3/22]

    Liked by 1 person

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