What Is Upcoding in Medical Billing?

what is upcoding in medical billing

Upcoding is the process in which medical providers submit billing codes to insurance companies for more expensive services than the ones the patient actually received. Medicaid, Tricare, and Medicare patients often fall victim to upcoding, violating the False Claims Act (FCA) and forcing taxpayers to cover fraudulent costs. If you see a simple procedure billed as a more complex one, and you’re wondering, “What is upcoding in medical billing?” do some digging to find out if your medical office upcodes medical procedures.

Avoid denials in medical billing when you hire PracticeForces for billing and collections. 

How Upcoding and Unbundling Work

Healthcare providers use Current Procedural Terminology (CPT) codes to bill insurance companies for particular tests, procedures, and medications. These codes translate to billing costs, telling insurance how much to pay the medical provider. Medical practices use upcoding to request payment for more complicated procedures they didn’t actually perform.

Providers can also use unbundling to commit insurance and Medicare fraud. Unbundling occurs when medical providers could use a single CPT code to encompass a procedure but instead break the procedure down and charge for each part of the procedure. For example, a surgical CPT may cover the cost of sedation, surgeons, and aftercare procedures, but by billing for those services separately, the hospital receives higher reimbursements from the patient’s insurance company.

The Negative Effects of Upcoding

Learning what upcoding is in medical billing may make you wonder how this type of fraud affects patients and medical staff. While hospitals and medical providers line their pockets with fraudulent medical bills, taxpayers take up the slack by continuing to pay into federal insurance programs like Medicare and Tricare. To deter medical providers from upcoding, the US Department of Justice has created a reward system for anyone with proof of medical fraud.

How to Recognize and Report Upcoding

Many doctors, nurses, and other medical professionals may ask, “What is upcoding in medical billing” without realizing that their billing office or hospital participates in the fraud, either intentionally or accidentally. 

By carefully inspecting the codes used in medical bills, you can recognize when your billing office charges more than necessary for a particular service. Upcoding whistleblowers range from doctors to administrators, meaning that anyone involved in the medical process can look for and recognize signs of upcoding or unbundling.

If you believe that your medical office or provider uses upcoding or unbundling practices, hire an attorney to help you file a qui tam suit under the False Claims Act (FCA). Reward funds can consist of up to 25% of the amount refunded to Medicare after upcoding adjustments.

Protect Your Practice Against Upcoding Fraud

The best protection against upcoding involves regularly checking in with your medical billing office and ensuring that they use the proper codes to report to federally funded insurers. Wondering, “What is upcoding in medical billing” often means you suspect it’s happening, so report medical billing fraud if you find proof to relieve federal insurance agencies and taxpayer burdens. 

Learn more about PracticeForces’ medical billing services by calling (727) 499-0351.

Parul Garg, CEO and co-founder of PracticeForces, has significantly contributed to the growth of over 1,000 U.S. medical practices through her expertise in medical billing and coding since the company’s inception in 2003. With a background in Computer Science and an MBA in Human Resources, her leadership and AAPC-certified coding skills have been pivotal in managing the company’s operations effectively.

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