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Health Care Fraud: The Problem Of “Upcoding”


Upcoding is a very common type of fraudulent activity in the health care industry. Many have witnessed numerous whistle blower cases which have successfully exposed fraud executed by providers where in these companies perform upcoding of treatment and/or services. Upcoding cases take time and effort to detect, especially lacking the assistance of whistle blower within the health care providers who are at odds of cheating insurance companies.

What is Upcoding in the Health care Industry?

Upcoding is a serious risk of compliance whether it has been done intentionally or unintentionally. This could result in payer audits, compensation take backs, and expenses resulting from abusive billing.

“Upcoding” refers to reporting a higher level of service or process or even a complex diagnosis, which is not supported by medical documentation, medical necessity, and medical facts. In short, “Upcoding” happens when a provider sends codes that are for more serious and at times, more expensive clinical determination or medical processes than what is  truly diagnosed or performed by the health care provide. For example, if a patient has acute bronchitis but is reported to having been diagnosed with chronic bronchitis is upcoding.

The employment of software for electronic health records (EHR) can help facilitate upcoding. Through the use of this program, providers can simple copy-paste the medical notes from the patient’s earlier visit onto a more recent note for his or her current treatment.  This will lead the diagnosis to appear that the provider was able to diagnose and treat all of the conditions specified on the list. Providers can also incorporate the options on menus where in it restricts the EHR software to displaying only codes for diagnosis and treatment with the highest rates if reimbursement.

The many fraudulent activities in the health care industry regarding claims with insurance companies is one of the main reasons why these insurance providers remain strict with their procedures.