Upcoding is a term that is not defined in the regulations but is generally understood as “billing for services at a higher level of complexity than the services actually provided or documented.”1 In fact, its definition in the literature is largely applied by researchers with respect to the specific context of ...
Charging for services not rendered: Sometimes, invoices include charges for diagnostic tests, treatments, or procedures that a patient never received. This could be anything from blood tests to complex surgeries that are listed on the billing statement but never performed.
“Upcoding” occurs when a healthcare provider submits codes to Medicare, Medicaid, or private insurers for more serious (and more expensive) diagnoses or procedures than the provider actually diagnosed or performed.
Examples of Unbundling Healthcare in Medical Billing
If a hospital were to bill for the incision and stitches performed during a surgery as separate procedures, this would be an example of “unbundling.” Another example would be blood work.
Unbundling is a type of billing fraud that involves submitting inaccurate codes for medical services to receive higher reimbursements. Whistleblower who report unbundling in healthcare can potentially receive substantial awards through the False Claims Act. Updated October 1, 2024.
It's simple to define what kickbacks in health care are. If a physician or medical provider uses any payment or compensation to encourage a patient to come to their office, or to encourage another medical provider to refer patients to their office or facility, that is a kickback.
Undercoding or “downcoding” occurs when a billing provider intentionally codes a visit as less serious or extensive than it actually was. Conversely, overcoding or “upcoding” involves submitting codes for services that were never received or reporting a visit as more intensive than it actually was.
Upcoding is when a provider assigns an inaccurate billing code to a medical procedure or treatment to increase reimbursement. Medicare abuse can also expose providers to criminal and civil liability. Program integrity includes a range of activities targeting various causes of improper payments.
Deliberately increasing the level of service code to receive higher reimbursements is called: upcoding.
Examples of Fraud
Some examples of common types of fraud include: Billing for services, supplies or equipment not provided.
FWA in healthcare stands for fraud, waste, and abuse – an issue currently estimated to cost the country between $68 billion and $230 billion each year, or between 3% and 10% of annual healthcare spending.
Both the doctor and the nursing home wind up billing Medicaid for the doctor's services. Another example would be where one medical practice conducts diagnostic tests and sends the tests to another facility to read and interpret the results.
FRAUD is a person's or entity's intentional deception to obtain payment or benefit they are not entitled to receive from an insurer or government health care program.
The difference between arrears billing vs. billing in advance is simple. With arrears billing you pay after work is done. If you bill in advance, you send an invoice for the full and total amount before work commences.
Medicare Abuse occurs when providers seek Medicare payment they don't. deserve but they have not knowingly or intentionally done so. Abuse can also involve billing for unsound medical practices.
The CPT terminology is the most widely accepted medical nomenclature used across the country to report medical, surgical, radiology, laboratory, anesthesiology, genomic sequencing, evaluation and management (E/M) services under public and private health insurance programs.
Unbundling is the opposite of bundling: it's taking one offer and splitting it up into multiple offers. A good example of unbundling is selling MP3 downloads of a single album instead of the CD.
Unbundling in medical billing refers to the practice of using multiple procedure codes to bill separately for components that are typically covered under a single comprehensive code.
An example of the diagnosis upcoding would be a patient coming in for a cough and fever and the physician assigning J18. 9 (pneumonia) when the patient has not been tested for this diagnosis. Also, a psychiatrist was fined $400,000 and was permanently excluded from taking part in Medicare and Medicaid.
Downcoding, while not fraudulent, can still be subject to legal action if it creates disputes between health care providers and payers. Compliance with coding laws is essential to maintaining the reputation of healthcare organizations and avoiding legal repercussions.
The Physician Self-Referral Law, commonly referred to as the Stark law, prohibits physicians from referring patients to receive "designated health services" payable by Medicare or Medicaid from entities with which the physician or an immediate family member has a financial relationship, unless an exception applies.
The Exclusion Statute [42 U.S.C. § 1320a-7] outlines when individuals are excluded from participation in Federal health care programs such as Medicare, Medicaid, Tricare, and the Veterans Health Administration.
A kickback is an illegal payment made to someone, often in a position of power or influence, as compensation for facilitating a service, favor, or preferential treatment. While kickbacks often involve cash, they can include anything valuable to another party, such as a credit, a gift, or an act done in return.