Medicare Fraud: Upcoding

All insurance companies have CPT (current procedural terminology) codes attached to every conceivable medical procedure. The CPT codes determine how much money the insurance company will reimburse the medical provider for services of care. Medicare, Medicaid, and any private or other governmental payer of healthcare services use these codes to pay providers a specific, agreed upon amount.

Medicare Fraud: Upcoding

Medicare is a government agency that provides medical services to seniors. Medical providers apply to be a part of the Medicare reimbursement system, and when those providers serve senior patients that have Medicare as their insurance company, Medicare will then pay for services rendered.

When a provider performs a services and then sends a bill to Medicare for a higher paying service than what was performed, that is called upcoding. Upcoding is fraudulent billing to Medicare. For example, a patient visits their doctor for a regular checkup that would normally be reimbursed at $60 according to the checkup CPT code. The doctor then bills for an extended checkup with a CPT code reimbursement of $100. That is upcoding, and it is a fraud.

A provider billing Medicare understand the complex system of coding reimbursement. Most claims submitted by providers are computerized, and there are many companies that contract with Medicare to pay the claims using government funds. Upcoding can dramatically increase reimbursement to the medical provider, so, unfortunately there are incentives on the part of the provider to upcode.

Detecting Fraud

It is often very hard to catch medical providers who upcode, based on the number of reimbursement claims that pass through Medicare. There are random audits, but only two percent of all claims are audited each year. Generally, upcoding is identified through someone who is aware of the issue and decides to blow the whistle, or tell, on the medical provider. That is why laws have been passed to protect whistle blowers from harm.

In Latin, Qui Tam means, who sues on behalf of the King as well as for himself. It means that lawsuits can be bought by an informer and part of the penalties can be awarded to the informer, or whistleblower. Qui Tam Whistleblower Plaintiffs have received over millions in rewards for reporting and uncovering fraud against the United States Government, in part for reporting upcoding fraud.

One instance is the suit brought against HCA, Inc. (formerly Columbia/HCA) in which HCA subsidiaries agreed that they would pay over $1.7 billion for false claims against Medicare and other federal health programs in 2003. Part of the payment included $250 million to resolve overpayment claims from cost reporting practices. Under this settlement, the whistleblowers who reported the malfeasance received a combined share of $151,591,500.00.

Anyone aware of an agency or organization that is defrauding Medicare for upcoding offenses, or any other fraudulent practice, can contact a Whistleblower lawyer. While no one really likes to be termed as a whistleblower, Medicare fraud for upcoding ends up costing the public more than just money. Incorrect or fraudulent diagnosis on an individual could potentially put that individual’s life in jeopardy in case of an emergency when incorrect information is noted on the medical chart.