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Upcoding Can Cost You Money and Your Health

Learn about this fraudulent practice and help put a stop to it.

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Updated October 19, 2013

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Upcoding is fraudulent medical billing that costs us all money, and possibly our health. Here's how upcoding works, why it is so costly to patients, and what we can do to help stop it.

Each procedure performed by a doctor or other healthcare provider has a code attached to it that allows them to bill your insurance, Medicaid or Medicare, or whoever your payer is (even you.) That code is called a CPT code (current procedural terminology).

When your doctor sends in his or her bill to your payer, that CPT code determines how much he or she will get paid. Of course, different codes allow them to bill for higher or lower amounts of money.

As long as the provider uses the right code, then the provider will be paid whatever he or she has earned by performing the services and procedures performed.

Upcoding, then, refers to the practice of assigning a code that commands more money than the correct code would pay. For example, say the doctor sees you for a quick check up. The code for that might mean she would get paid $50. But she might assign it the CPT code for an expanded check up, which means she would be paid $100.

Upcoding Can Have Negative Effects on Your Health

Depending on the code the doctor uses, the practice of upcoding can have negative consequences for your future care and your future ability to get health insurance.

For example, suppose you have what feels like heart palpitations. Your doctor may run an EKG and discover that you have no problem with your heart. You leave, relieved. But your doctor bills for that EKG and for an appointment for a heart patient, which brings in more money. Now your medical records reflect that you may have a problem with your heart.

The result is that your future treatment may be affected by someone who thinks you have a problem with your heart. Another doctor might prescribe a drug differently, or if you show up in an ER, they may treat you differently. You won't receive appropriate treatment because your records are wrong.

Further, say you lose your current job and you find yourself needing to get health insurance later. You will be turned down for having a pre-existing condition. Even if legislation passes that no longer allows for rejections for pre-existing conditions, your insurance will cost you more than it should.

This also points out the need for us patients to take control of our medical records, and to double check for errors.

Upcoding is Illegal and Costs Us Money

Upcoding is illegal and fraudulent. Any provider who intentionally upcodes is breaking the law.

As patients we might think it doesn't matter to us because it's the insurer who is paying for it. However, upcoding costs all of us money, both as taxpayers and as premium payers. When a Medicare or Medicaid patient is upcoded, then we all pay for it. If a private insurer receives an upcoded bill, then premiums go up for everyone who has that insurance. One upcoding provider can cost us all millions of dollars over time. It's coming out of our pockets with no benefit to anyone's health, and major detriments to everyone's wallets.

If you check your Estimate of Benefits (EOB) and you believe your doctor is guilty of upcoding, there are some steps to take to make sure your payer has not been billed fraudulently.

  • First, contact your provider and ask about it. They can either explain to you why it is correct, or they may offer to correct it. In either case, it will put you on notice that you need to continue checking your EOB each time one arrives.
  • If you aren't satisfied with the answer, and even if they offer to correct it, you'll want to check past EOBs to see if you can identify a trend in upcoding.
  • If you suspect your provider is upcoding on a regular basis, you'll want to report it to your payer right away. If that provider has upcoded your care more than once, then he or she has done it to others, too. You can help stop it before it costs you, and the rest of us, anymore money than it already has.

If your payer is a private insurer, then call their customer service person and ask who you should report upcoding fraud to.

If you receive Medicaid, you'll need to check with your state's Medicaid office to see how they want upcoding or other fraud reported.

If your payer is Medicare, you'll find the steps for reporting fraud, including upcoding, at the Medicare website.

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