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September 2, 2016

How Your Practice Can Deal with Upcoding and Downcoding

September 2, 2016

medical billing and coding

Part of running a successful medical practice is navigating the complicated world of medical coding and billing. Doing so means understanding obstacles – both foreseen and unforeseen – and overcoming them with proven solutions.  

Two problems with medical billing and coding that are commonplace, but not always understood, are upcoding and downcoding. Both involve how you code services rendered when you file a claim for payment, and both can have an impact on revenue.

Here, we’ll talk about upcoding and downcoding, and cover the risks of both – and how to deal with these circumstances.

What Is Upcoding?

As a piece of the claims-filing process, each service rendered is coded with current procedural terminology codes, or CPT codes. A CPT basically tells the payer what specific service was performed. During the course of treatment, each service is recorded on the patient’s chart, which is then used to document the services that require payment.

Upcoding is when the CPT code listed on the claim is for a service or procedure that is at a higher level than the one actually performed and listed on the patient chart. This can be deliberate – which is fraudulent and illegal – or by mistake, but either way, it needs to be corrected.

The main risk of upcoding is an audit that reveals your practice has received more money than it was supposed to according to the actual services performed. Earlier this year, the Government Accountability Office reported that the federal government was overbilled by $14.1 billion in 2013 to Medicare Advantage practices. Thus, the government has a vested interest in eliminating overbilling and upcoding.

What Is Downcoding?

Downcoding is the opposite of upcoding. If you perform a service but record the CPT for a lower-level service, that is downcoding.

Downcoding also leaves you vulnerable to an audit, which is never good. But, it can also cost a practice thousands of dollars a year in lost revenue because you’re not getting the higher rate of pay that you would if you had recorded the service properly.

According to the National Correct Coding Initiative (NCCI):

“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.”

This is an important issue for compliance and for your bottom line.

Avoiding These Medical Billing and Coding Mistakes

One way to avoid these costly and risky mistakes is to conduct internal audits on a regular basis. During the audit, you’re looking to reconcile the service rendered on the patient’s chart with the services coded on the payment claim. This is your chance to catch any discrepancies before the claim is submitted. How often these audits are needed varies from practice to practice. We would suggest having an internal audit at least once a quarter – and having them more frequently if time allows.

Another way is to contract with a medical billing company to handle your coding and billing for you. This eliminates the risk of your staff committing errors, puts coding in the hands of trained professionals, and saves money. Not only can you avoid losing thousands in revenue, you can also cut down on overhead.

Upcoding and downcoding can hurt a practice. Avoiding them should be a practice’s main priority when it comes to billing.

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