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Upcoding for medical care – it’s everywhere

“Thousands of doctors and other medical professionals have steadily billed higher rates for treating elderly patients on Medicare over the last decade — adding $11 billion or more to their fees and signaling a possible rise in medical billing abuse.”

That’s a statement from a study of Medicare billing and coding practices released by the Center for Public Integrity, and is the lead on a lengthy and well-documented article detailing the dramatic increase in higher-complexity medical codes billed to Medicare over the last decade.

The implications for taxpayers, private insurers, workers comp and auto payers are obvious.  If docs and their billing departments are upcoding for Medicare office visits, they almost certainly are doing the same for all patients.

Interestingly, the increasing use of electronic medical record systems by many physician practices may be a contributing factor, as the systems “make it easy to create detailed patient files with just a few mouse clicks.”  These details are essential to demonstrating and documenting the level of work and time commitment involved in specific office visits.

That said, just because a doc has mostly higher-level office visits doesn’t mean they are doing anything wrong. Some providers’ patients are just sicker (“higher acuity”) than others’, requiring more time and effort.

What does this mean for you?

It is highly likely your mix of E&M codes has trended towards the more complex over time.  You may well want to identify those docs where the mix has swung dramatically at some point as that may indicate inappropriate billing.

6 thoughts on “Upcoding for medical care – it’s everywhere”

  1. It’s not just a Medicare thing: several of the WCRI Compscope Medical studies have also demonstrated this phenomenon within the WC systems of several states.

  2. It is everywhere. We see it in the small Taft Hartley plan I administer. ICD-10 will have the unintended consequence of making this worse.

  3. Maybe there was chronic underpayment of services for years do to poor documentation, which is now being corrected. In other words perhaps level 4 services had been given away at level 3 prices, but are now being documented and coded more efficiently.

    1. Tom – thanks for the comment.
      While theoretically possible, highly unlikely. the data clearly indicates a significant increase in the volume of visits coded at higher levels, however this covers ALL visits – there are relatively few lower-end visits and many more 4s and 5s. This does not make sense, as there should be a mix of all levels. In fact what seems to be occurring is conscious effort to upcode to increase billing.

  4. Upcoding has always been a weak spot in fee-for-service and claims-based medicine.
    There are two potential cures:

    a. global budgets for hospitals, and doctors paid by salary

    b. a budget driven fee schedule with three codes only –

    one for hospital stays, say $2000 a day
    one for office visits, say $100
    one for diagnostic tests, say $250

    If providers increase volumes to overcome this, then the fees go down automatically.

    This is how the Japanese control costs.

    Bob Hertz, The Health Care Crusade

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Joe Paduda is the principal of Health Strategy Associates




A national consulting firm specializing in managed care for workers’ compensation, group health and auto, and health care cost containment. We serve insurers, employers and health care providers.



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