What’s Up Doc? Examples of Upcoding Bleeding Medicare 

What Is Upcoding in Healthcare?

Medicare fraud manifests itself in many ways – one of the most common schemes is upcoding. Upcoding is a form of medical billing fraud where healthcare providers intentionally submit claims to insurance companies or government programs, such as Medicare or Medicaid, with codes that reflect a more expensive service or quality of care than what was actually provided. It’s done because certain health care providers believe no one is watching and that they can get away with it, and in the case of Medicare or Medicaid, essentially rip off the taxpayers. It’s hard to detect upcoding from the outside although one way the government does so is by comparing how one practice codes its encounters versus all others.  The way that upcoding cheats have been caught in the last decade has been through the use of whistleblowers under the False Claims Act, a statute that combats Medicare Fraud, which just passed over $50 billion in recoveries and thus billions in whistleblower rewards.   

Medicare fraud upcoding whistleblowers are extremely important to detect the scheme since sometimes the fraudsters give themselves away by reflexively billing every encounter for a longer period of time than it actually occurred or a more sophisticated level of complexity.  But other times, it may happen every other time, so the fraud is going on, but it’s harder to detect without someone from the inside blowing the whistle.

Here are some general concepts of upcoding and then more specific codes about how this can functionally occur. 

Examples of Broad Based Upcoding

Billing for a Higher Complexity Visit: A common form of upcoding occurs when a healthcare provider bills for a higher-level office visit than what was actually performed. For instance, they might bill for a comprehensive examination (Level 4 or 5) when only a basic evaluation (Level 2 or 3) took place.

Fictitious Diagnoses: Providers may falsely diagnose patients with more severe conditions than they have to justify higher billing. For instance, a patient with mild hypertension might be diagnosed with severe hypertension, leading to inflated bills. An asymptomatic Covid patient may be billed as symptomatic.

Unbundling Services: Healthcare providers might unbundle services that should be billed together into separate claims to maximize reimbursement. For example, they may bill separately for individual lab tests that are normally bundled together. This is not pure upcoding since it’s separating the bill, but it falls into the same Medicare fraud scheme and the falsified different dates of service lead to a n unjustified higher level of reimbursement.

What Is Upcoding in Medical Coding?

Upcoding in medical coding refers to the practice of using a billing code that indicates a more severe or complex diagnosis or procedure than what was actually provided. This results in higher reimbursement from insurance companies or government healthcare programs like Medicare or Medicaid.

Specific Examples of Upcoding

(Inherently the upcoding is when the encounter should qualify as a Level 1 reimbursement based on the criteria, but the provider falsely codes and bills for a Level 2 or higher reimbursement – or to simplify further when the reimbursement level sought is higher than the actual level performed.)

Level 1 (99201) Evaluation and Management Visit:

Criteria for Level 1: Level 1 E&M visits involve straightforward encounters with minimal medical decision-making. They include a brief evaluation of the patient’s medical history and a limited examination. The visit may last for a short duration, addressing minor or self-limiting problems.

Specific Example: A patient schedules an appointment for a minor skin rash. The physician briefly reviews the patient’s medical history, asks a few questions about the rash’s appearance and duration, conducts a minimal examination, and provides a straightforward treatment plan, such as prescribing a topical cream.

Impact on Reimbursement: Level 1 visits have a lower reimbursement rate due to their low complexity and minimal time spent.

Level 2 (99202) Evaluation and Management Visit:

Criteria for Level 2: Level 2 E&M visits are slightly more complex than Level 1 visits. They involve a more comprehensive assessment of the patient’s medical history and may require a more extended examination. Level 2 visits often address conditions that are more than self-limiting or require more in-depth evaluation.

Specific Example: A patient presents with a persistent cough and mild fever. The physician takes a detailed medical history, asks about symptoms, conducts a more comprehensive physical examination, and orders a chest X-ray to rule out pneumonia.

Impact on Reimbursement: Level 2 visits result in a higher reimbursement rate compared to Level 1 visits due to their increased complexity and resource utilization.

2. Emergency Department Visits:

Level 3 (99283) Emergency Department Visit:

Criteria for Level 3: Level 3 emergency department (ED) visits are appropriate when a patient’s condition requires a more thorough evaluation and higher-level decision-making. This level involves assessing moderate to severe medical problems.

Specific Example: A patient with chest pain is evaluated, undergoes an EKG, and is monitored for several hours for potential cardiac issues.

Impact on Reimbursement: Level 3 ED visits have a higher reimbursement rate compared to lower-level codes due to the complexity and extended evaluation required.

Level 4 (99284) Emergency Department Visit:

Criteria for Level 4: Level 4 ED visits are reserved for cases of high complexity and decision-making. They involve comprehensive evaluations, potentially including specialized testing and consultations.

Specific Example: A patient arrives at the ED with severe abdominal pain. Extensive diagnostic tests, consultations with specialists, and a surgical consultation are conducted to determine the cause.

Impact on Reimbursement: Upcoding to Level 4 ED visits results in significantly higher reimbursement due to the increased complexity and resources involved.

Please note that upcoding in these scenarios occurs when providers falsely document or exaggerate elements of the visit to justify billing at a higher level, potentially leading to inflated healthcare costs and Medicare fraud if not accurately reflected in the patient’s actual medical condition and the complexity of care provided.

3. Ambulatory Surgical Center (ASC) Procedures:

Lower-Level Code (Example: 66982 – Cataract Surgery):

Criteria for Lower-Level Code: The lower-level code represents a standard procedure performed in an ASC. It includes the removal of a cataract with a standard intraocular lens implant.

Specific Example: A patient undergoes cataract surgery with a standard lens implant, which is a typical and straightforward procedure.

Impact on Reimbursement: The reimbursement for the lower-level code reflects the standard cost of the procedure.

Higher-Level Code (Example: 66984 – Cataract Surgery with Complex Lens Implant):

Criteria for Higher-Level Code: The higher-level code indicates a more complex cataract surgery involving specialized intraocular lens implants, often necessitated by unusual circumstances or patient-specific needs.

Specific Example: A provider upcodes a routine cataract surgery to a higher-level code by indicating the use of a premium intraocular lens implant when a standard implant was actually used.

Impact on Reimbursement: Upcoding to the higher-level code results in a higher reimbursement rate, potentially increasing the cost of the procedure.

4. Diagnostic Imaging Services:

Lower-Level Code (Example: 72148 – MRI of Lumbar Spine):

Criteria for Lower-Level Code: The lower-level code represents a standard diagnostic MRI of the lumbar spine without contrast.

Specific Example: A patient undergoes a routine MRI of the lumbar spine without contrast for the assessment of lower back pain.

Impact on Reimbursement: The reimbursement for the lower-level code reflects the standard cost of the MRI.

Higher-Level Code (Example: 72158 – MRI of Lumbar Spine with Contrast):

Criteria for Higher-Level Code: The higher-level code indicates the use of contrast during the MRI, often necessary for specific diagnostic purposes.

Specific Example: A provider upcodes a routine MRI without contrast to a higher-level code by indicating the use of contrast even when it was not administered.

Impact on Reimbursement: Upcoding to the higher-level code results in a higher reimbursement rate, potentially inflating the cost of the procedure.

These are just a few of many examples of upcoding in healthcare. Anytime a provider routinely seeks reimbursement for a higher level of service than performed its upcoding and if its against the Medicare or Medicaid program you have rights under the False Claims Act or against private insurance in California under The California Insurance Fraud Prevention Act or against Illinois private insurance under the Illinois Insurance Claims Fraud Prevention Act you have rights as a potential Medicare fraud whistleblower and you should consult with a whistleblower law firm to understand how you can help the system and report the misconduct.