Overcoding is Fraud:

Overcoding leads to insurance companies making much higher reimbursements than what the actual reimbursement should be. However, the penalties of getting caught far outweigh the advantages of getting a higher paycheck.

There are two typical ways that providers overcode, they are upcoding and unbundling.

• Upcoding: Misrepresenting a level of service or procedure performed in order to charge more or receive a higher reimbursement rate is considered upcoding. Upcoding also occurs when a service performed is not covered by Medicare, but the provider bills a covered service in its place.

• Unbundling: Some services are considered all-inclusive. Unbundling is billing for procedures separately that are normally billed as a single charge. For example, a provider bills for two unilateral screening mammograms, instead of billing for one bilateral screening mammogram.

Undercoding occurs when the Medical Billing code does not adequately reflect the full extent of the services performed by the physician. Undercoding means potential revenue is left on the table because you didn’t accurately code the procedure performed and missed out on reimbursement.

There are other uses for medical coding:

• To document or report the quality of patient care.
• To provide accurate communication by using a national classification system that is understood across payers and providers.
• To report data that is used for a variety of research studies such as diseases, drugs, procedures or trends in health care.
• To make important administrative decisions such as marketing, staffing, budgeting, and purchasing

Undercoding is an unwise course of action that can backfire.

For example, a practitioner who consistently under codes might be more likely for an audit if their services are below industry average. Insurance companies do not deny claims because codes reimburse higher than other codes. They are simply looking for codes to match the documentation on the patient’s record. The way to avoid denials is to ensure proper documentation.