UPCODING / DOWNCODING HOW TO AVOID?

Upcoding happens when providers bill for more expensive procedures than what they performed on their patients. This creates problems because the codes used don't accurately reflect the care given. Eventually, this can lead to overcharges or even fraudulent behavior in extreme cases. Healthcare practices that upcode can be in violation of several federal and state laws that will lead to severe legal and financial consequences. One of the glaring risks of upcoding is your healthcare practice being under an audit, and the audit reveals your practice has received more reimbursements than it was supposed to.

On the flip side of the medical billing coin, downcoding occurs when providers submit claims using lower-level codes than necessary. This may occur intentionally to reduce costs or unintentionally due to a lack of knowledge about proper coding practices. Like upcoding, downcoding also leaves healthcare practices more vulnerable to an audit, which no healthcare practice ever wants to experience.

Downcoding can also cost a practice thousands of dollars a year in lost revenue! When services are improperly coded with lower-level codes, the practice may receive lower reimbursement rates—resulting in lost revenue.

The NCCI (National Correct Coding Initiative) addresses downcoding by stating:

Physicians must avoid downcoding. If a HCPCS/CPT code exists that describes the services performed, the physician must report this code rather than report a less comprehensive code with other codes describing the services not included in the less comprehensive code.