What is upcoding in medical billing? Well! It is a coding error that can make insurance companies pay more than what they owe the provider. But things are not as simple! This coding error can also be termed fraudulent activity, costing you your reputation and resulting in heavy penalties, such as cancellation of your practice license.
Yes, now I have your full attention! Worry not. We have you covered. Read this guide till the end if you do not want to be in hot water.
This guide will discuss what is upcoding and unbundling. We will also share some pro tips to help you avoid it. So, without further ado, let’s get started!
What is Upcoding in Medical Billing?
Upcoding occurs when a healthcare professional requests payment with an inaccurate CPT code that offers a higher reimbursement than the CPT code that accurately reflects the services that the patient received from them.
Examples of Upcoding
- Example # 1 – A healthcare provider performed a standard check-up with a CPT code that will reimburse $60. However, when invoicing Medicare, the physician used a CPT code for an extended check-up, which would result in a $100 reimbursement. Thus, the physician stole $40 from taxpayer-funded Medicare by upcoding.
- Example # 2 – Upcoding can also happen when medical professionals submit CPT codes that precisely match the services rendered, even if those services weren’t necessary from a medical standpoint. That is, submitting the CPT code for an extensive check-up when a physician knows a Medicare patient only needs a routine check-up to get a higher reimbursement is still fraudulent and against the False Claims Act.
- Example # 3 – Upcoding in medical billing is when hospitals bill for inpatient stays at the highest severity level despite the patient’s visit being a routine one. For the unversed, at least one secondary diagnosis must be a significant complication or comorbidity, such as acute respiratory failure or sepsis, to bill for the highest severity level.
- Example # 4 – Another example of upcoding is when a hospital bills for care as though it was rendered by a healthcare provider. However, a nurse or physician’s assistant has provided it in reality, which is a lower-paying service.
- Example # 5 – Upcoding also occurs when a home health agency bills patients for more time-consuming services than they rendered.
- Example # 6 – An urgent care facility may also be involved in upcoding by billing for medical services that were longer or more complicated than what was rendered.
- Example # 7 – Durable medical equipment (DME) providers can also be involved in upcoding scams by billing for more expensive equipment than supplied.
What is Unbundling in Medical Billing?
When submitting CPT codes, unbundling is a type of upcoding. It occurs when a healthcare provider submits individual CPT codes for each service rendered when a bundled CPT code that might have covered the entire operation was more relevant.
Insurance payers often pay less for the bundled CPT codes compared to each service being submitted under its individual CPT code. Thus, unbundling can also be identified as False Claims Act liability.
How Hospitals and Physicians Can Prevent Upcoding?
You can experience repercussions from upcoding. It may result in reimbursement setbacks, payer audits, and fraudulent billing penalties. Moreover, it can tarnish your practice’s reputation or may lead to the cancellation of your license by drawing legal attention and possible fines.
Thus, here are some tips to help you avoid upcoding in medical billing:
Invest in Training
Start by hiring qualified billing specialists and certified professional coders (CPCs). Train them on the consequences of upcoding, and how to perform accurate coding, using relevant examples from your specialty.
Use EHRs Wisely While Charting
Electronic health records (EHR) systems have revolutionized how physicians chart each patient encounter. However, providers should not blindly accept all coding suggestions and ask themselves whether a certain code makes sense in a given situation.
Harness the Power of Technology
You can use look-up tools to identify when to bundle different procedure components for accurate billing. Besides, these tools can help you understand when you should use modifiers.
Perform Internal Audit
Conduct internal audits to look for billing, coding, and documentation practices. You may also hire an external auditor to validate internal audits. Besides, train your staff on industry best practices.
Implement Coding and Billing Policies
If you do not have a policy yet, it is time you start working on it. Sometimes, human errors can also lead to upcoding. Thus, introduce clear policies. For example, define in your policy to double-check the claim, when not to use copy and paste, etc.
Outsource Medical Billing & Coding
Let’s admit it! You cannot do everything on your own. Being a physician is not easy, and handling the billing and coding requirements adds to the stress. Offload your shoulders and outsource medical billing and coding to professionals.
Bottom Line
In this guide, we discussed upcoding in medical billing and shared some of its examples. We also explained another type of upcoding, i.e., unbundling of claims, and shared some tips to help you avoid these billing errors.
However, medical billing is an intricate process that demands continuous learning and training to stay current with changing coding and billing requirements and attention to detail. Thus, if you struggle to handle it in-house, you can outsource healthcare revenue cycle management to MediBill MD, to ensure accurate claim submissions and reduce denials.
