What is Upcoding in Medical billing - Example

Medical providers use a standardized system of numerical codes for patient services. Each billing code is tied to a particular group of services and will result in a reimbursement to the health care provider. Misuse of the standardized codes to obtain more money than is allowed by law is commonly termed upcoding or upcharging.

Here is some example for up coding.

• A physician reported treating several patients for flu symptoms during the winter. However, the third party billing agency upcoded all of the claims and charged each patient for an office visit and diagnosis of bronchitis and sinusitis, which resulted in a higher reimbursement rate paid to the provider.

• Physicians operating at an out patient facility used the Current Procedural Terminology (CPT) code 99213 to bill most services for office visits for Tricare members. However, the third party billing agency consistently changed the CPT code to 99214. The cost for procedure code 99213 was $45.68; however, the 99214 procedure code cost was $71.50. The auditor concluded that the change from CPT code 99213 to 99214 resulted in excess charges totaling $300,000.

• During the audit, a review of Tricare Explanation of Benefits (EOB) forms and corresponding CPT codes submitted by a third party billing agency was conducted. The auditor randomly selected fifty patients receiving out patient medical treatment during the past month and requested voluntary responses describing their diagnosed illnesses and types of treatments received. The auditor then compared the patients responses to the CPT code documented on the EOB forms. The auditor identified one instance where the CPT code assigned by the third party billing agency did not accurately describe the type of medical treatment received. Specifically, a patient claimed to visit a dermatologist for a routine skin cancer screening and Tricare was charged for removing a cancerous growth

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