How Upcoding Works and Why Your Healthcare Organization Should Avoid It
Healthcare fraud can take many forms. Healthcare regulators are champing at the bit to pursue any possible fraud concerns, especially if the defrauded party is the government. Often, the discovery of a simple mistake can lead to a full regulatory investigation. If the investigation uncovers intentional conduct–even if the perpetrators were unaware they were committing criminal acts–severe penalties and even prison terms can result. If you have any concerns that your staff has been engaged in upcoding or other irregular billing practices, it’s important to conduct your own internal investigation and nip the problem in the bud.
Below, we discuss upcoding and the risks it can present to your healthcare practice. If you need assistance with an internal investigation or are facing allegations of healthcare fraud, call a dedicated California healthcare fraud defense lawyer at the Law Offices of Art Kalantar for advice and representation.
What Is Upcoding?
Upcoding is a form of overbilling. Upcoding refers to the billing codes used to indicate the patients’ procedures, visits, and issues presented. When a patient has an appointment, the provider assigns a code, and that code is used to generate a bill.
Upcoding occurs when the provider deliberately uses the wrong codes in order to generate a higher price. Upcoding can take a number of forms, including:
- Using the code for a new patient, rather than an established patient, which pays at a higher rate
- Using the code for a physician when the patient actually met with someone whose rates are lower
- Using the code for a more complex, expensive service than the service provided
- Including the codes for additional services or diagnostics that were either medically unnecessary or not provided
- Using multiple codes to account for a single procedure or course of treatment (also called “unbundling”)
When the bill is sent to the payer, the provider is representing that every service on the bill was provided as coded. Whether the payer is a private insurer or the government, making misrepresentations on a bill to fraudulently increase payments is a very serious offense.
What Are the Dangers of Upcoding?
Upcoding is considered a form of healthcare fraud. Upcoding can be charged as a violation of the federal False Claims Act (FCA) as a form of medical billing fraud and/or Medicare fraud. Including a particular code on a bill constitutes a statement asserting that all of the coded services were provided; if the provider has not actually provided all of those services, the provider is presenting factually false information in violation of the FCA.
If the upcoding was committed “knowingly,” the provider can be charged with a criminal violation of the FCA. A criminal conviction for an FCA violation can lead to massive fines and even incarceration. In May 2022, for example, a California doctor was convicted of perpetrating a Medicare fraud scheme to the tune of $12 million for upcoding and billing for unnecessary procedures. The doctor was found guilty of seven counts of healthcare fraud and sentenced to nearly eight years in prison.
Call a California Healthcare Fraud Defense Attorney for Help Defending Against Upcoding Charges
For help defending against upcoding or other billing fraud charges, for legal assistance with regulatory compliance issues, assistance with building your medical practice, or advice and representation concerning internal investigations, auditing, employment matters, governance issues, business disputes, licensing, or any other California healthcare law matter, contact the Law Offices of Art Kalantar in Los Angeles or California statewide at 310-773-0001.
