Upcoding occurs when health care providers falsely represent that patients received a more complex or expensive service than what was actually provided. For example, a doctor may submit a claim to Medicare using a billing code for a 45-minute consultation, when in fact she only spent 15 minutes with the patient.
Health care providers use HCPCS (Health care Common Procedure Coding System) codes to bill federally-funded health care programs, including Medicare, Medicaid, or Tricare. In an upcoding scheme, providers knowingly and wrongfully submit a higher-paying HCPCS code to represent that a more complex and expensive procedure was provided to a patient in order to receive higher reimbursement. Because Medicare billing is electronic, it is easy for providers to bill for inappropriate HCPCS codes and defraud federally-funded health care programs.
Government health care programs utilize specific billing codes that “bundle” certain related services or tests together. Providers are required to use these bundled codes to obtain reimbursement for all of the associated services or tests as a whole, rather than billing for each service or test separately. Unbundling is the practice of submitting bills for payment in a piecemeal fashion in order to maximize reimbursement by billing and receiving payment for individual related tests or services.
For example, Complete Blood Count (“CBC”) testing usually involve over a dozen tests for blood cell count and platelets, among other things. However, because CBCs are so commonly ordered and the process has become automated, they are billed using one code rather than utilizing multiple codes. Accordingly, a provider receives a single reimbursement amount for the CBC, although it involves over a dozen separate tests. However, billing codes exist for the individual tests performed in a CBC in the event that they are properly required to be performed separately. Therefore, it is possible for a provider to improperly “unbundle” the procedure and bill for each individual test in order to receive higher reimbursement. For example, reimbursement for a CBC, which includes twelve tests, might be fifty dollars and the tests when submitted for payment individually might be ten dollars. By unbundling the CBC tests and billing for each test separately, a provider could improperly receive $120 for a CBC test when he or she should have only received fifty dollars.
Examples of successful cases:
- Fourteen hospitals spread across seven states agreed to collectively pay more than $12 million to the United States to settle a False Claims Act suit. The hospitals were all involved in a detailed plan to defraud taxpayers of millions of dollars. The hospitals would bill Medicare for services related to kyphoplasty, a procedure that is used to treat certain spinal fractures associated with osteoporosis. Instead of billing Medicare for the less expensive outpatient procedure, the hospitals used a code associated with a more expensive in-patient procedure, thereby “upcoding”.
- Hospice Family Care Inc. agreed to pay $3.7 million to settle a suit brought under the False Claims Act. The suit alleged that Hospice Family Care charged Medicare for a higher level of services than were actually provided. Hospice Family Care would use a billing code that paid at a higher rate than the code they should have used for the level of care necessary. In some instances the services may not have even been rendered.
- LHC Group, a home health provider, agreed to pay $65 million to settle a civil suit brought under the False Claims Act. LHC Group was accused of performing medically unnecessary procedures, and upcoding by using codes reserved for those patients who are homebound, when the patients were not. The codes associated with services rendered to a homebound individual pay at a higher rate.