The practice of “upcoding” in the submission of claims to the Medicare program is fraudulent and illegal. “Upcoding” is a term that describes the improper use of a billing code for a medical procedure or diagnosis that results in a higher payment to the medical provider than that warranted by the true procedure or diagnosis. Healthcare providers use specific codes to bill Medicare for particular services performed. The coding system used is called the Healthcare Common Procedure Coding System (HCPCS). Billing is done electronically and is processed by intermediary insurance companies on behalf of Medicare. Claims are then paid by these insurance carriers with government funds. 

Due to the complexity of this coding system and the electronic, rather than personal, review of such claim submissions, close examination of each code billed for is nearly impossible. Medicare randomly audits approximately 2% of submitted claims. The lack of close monitoring of electronically submitted claims combined with almost non-existent post-submission auditing makes the Medicare billing system ripe for abuse. The cost of Medicare and Medicaid fraud to the federal government is estimated to be in the billions of dollars. 
The practice of upcoding by a medical provider is usually revealed through the reporting of information of the fraud by an individual with first-hand knowledge or suspicion. The individual might be a medical professional with direct knowledge of an ongoing upcoding practice, or a Medicare beneficiary who notices a discrepancy on their Medicare Summary Notice. There are several avenues for reporting suspected cases of upcoding.

The official website of the Medicare program (www.Medicare.gov) provides instructions on how beneficiaries can report suspected Medicare fraud. Beneficiaries are instructed to review their Medicare Summary Notice and contact the medical provider to discuss the discrepancy. If the beneficiary is not satisfied with the outcome and still suspects fraudulent upcoding, they should contact the insurance company handling their claim for further instructions on reporting the suspected fraud.

The Office of the Inspector General also maintains a hotline for reporting fraud tips. Further information of reporting suspected fraud in this manner can be found at www.oig.hhs.gov.

Suspected Medicare in the state of Florida can be reported by contacting floridamedicarefraud@hp.com.

The practice of upcoding is a violation of Medicare laws and falls under the umbrella of the False Claims Act. The False Claims Act allows an individual to provide information regarding the defrauding of the government. This law is commonly referred to as the “whistleblower” law. A lawsuit, referred to as a qui tam action, is then filed against the perpetrator based upon the reported fraud. The reporting individual (also called the relator or whistleblower) can receive a portion of any funds recovered via settlement or judgment as a result of the lawsuit.