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What Is Upcoding?

"Upcoding" occurs when a healthcare provider knowingly submits a claim with an incorrect billing code in order to increase reimbursement. A healthcare provider can do this by submitting Current Procedural Terminology (CPT) codes for lengthier, more expensive, or more serious procedures, equipment, or diagnoses than actually provided. For example, if a physician exaggerates the severity of their patient's condition in order to increase billings, that would be considered upcoding. Likewise, if a patient receives a brief consultation from a nurse, but the provider submits a claim for a higher cost consultation with a doctor, that would also be considered upcoding.

Electronic Health Records and Upcoding:

Electronic health record (EHR) practices designed to streamline medical record keeping can sometimes facilitate upcoding practices. For instance, medical providers may use the ability to customize menu options within EHR software to limit available options for diagnosis or procedure codes, listing only those codes that lead to the highest payment rates. Such settings could lead to physicians upcoding patients' visits. Similarly, copy-and-paste features common to many EHR software platforms allow medical providers to automatically include language from prior visits or another patient's records. While improving convenience, in some cases, this function also invites the use of duplicated clinical notes, and makes it easy to bill for or record work that was not performed during a particular visit.

What Is Unbundling?

"Unbundling" occurs when a healthcare provider uses two or more Current Procedural Terminology (CPT) billing codes that amount to a higher cost than if the provider used one appropriate, inclusive code. For example, suppose an individual undergoes surgery. Typically, the appropriate CPT code would include both the surgery performed and the use of the operating room. However, if the provider submits separate claims for each component, it would be "unbundling" to obtain larger reimbursement.

Examples of Upcoding Lawsuits

In 2013, Goldberg Kohn filed a lawsuit against IPC The Hospitalist Co. Inc. (IPC) – one of the largest providers of hospitalist services in the country. The lawsuit alleged that IPC submitted false claims to federal health care programs, such as Medicare and Medicaid. According to the lawsuit, IPC did so by encouraging its doctors to bill at the highest levels available, regardless of the level of service provided. The government decided to intervene in the matter. In 2017, TeamHealth Holdings, which had acquired IPC in 2015, agreed to pay $60 million under the settlement agreement.

In 2016, 21st Century Oncology Inc., a physician led integrated cancer care provider, and its subsidiary, South Florida Radiation Oncology LLC, agreed to pay $34.7 million to settle a legal claim with the United States government. The government alleged that the providers performed and billed for medically unnecessary procedures called Gamma function. The United States government further alleged that the procedure was performed by physicians and physicists who had not received proper training to interpret and utilize the Gamma function results. The lawsuit also stated that 21st Century Oncology continued to bill for the Gamma function procedure when no physician was available to review the test results or when no result was available due to technical failures. The lawsuit was filed by a former physicist at South Florida Radiation Oncology, whistleblower Joseph Ting.

What Should You Do If You Encounter Upcoding or Unbundling?

Under the False Claims Act, employees who become aware of fraudulent billing practices can file a qui tam lawsuit on behalf of the government to address these practices. Whistleblowers who sue on behalf of the government may receive between 15 to 30 percent of the money recovered by the government, if the suit is successful.

The whistleblower attorneys at Goldberg Kohn are familiar with cases involving upcoding and unbundling. If you are aware of upcoding and unbundling practices, call Goldberg Kohn at 312-284-3258 or contact us online. We are always willing to provide you with a free, confidential consultation to discuss a potential case.