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When a provider is accused of upcoding, or manipulating insurance codes for Medicaid or Medicare payments, a whistleblower can report this and become entitled to an award.

What Is Upcoding in Medical Billing?

When a patient visits a physician’s office, hospital, or other healthcare facility, information about the visit is captured in medical records for not just the patient’s purposes, but also for insurance. The codes assigned to these procedures are important for reimbursement purposes, but it is against the law for a provider to manipulate them.

Providers who are part of the Medicare and Medicaid system have to submit codes to explain what procedures occurred so that the practice and doctor can be paid for the service.

Since certain kinds of services will have greater reimbursement amounts than others, a more severe condition is typically more expensive for the provider to treat and manage, and therefore the reimbursement for Medicare might be higher. It is unethical and fraudulent for providers to inform Medicare that they gave a patient more expensive or extensive service than they actually did.

This is a process known as upcoding and is a clear violation of the federal False Claims Act. Whistleblowers who become aware of a medical organization’s upcoding procedures could be eligible to initiate a lawsuit. Participation in this lawsuit enables the whistleblower to potential recovery of a reward if and when the case is settled.

How Do Billing Codes Work?

Every medical procedure, office visit, and diagnostic test performed by a health care provider has what is known as a Current Procedural Terminology code, as established by the American Medical Association. The CPT code sent to a payer from a hospital or other medical facility corresponds to the different services and procedures provided to that patient.

Although the code does not translate directly to the payment, the hospital payment is only accurate as long as the bill contains the correct code. Upcoding is illegal, and many different health care providers and hospitals have been caught doing it.

An administrator who runs a health care system can professionally benefit when profits are impressive, even if these numbers were obtained through the process of upcoding.

Upcoding Fraud and False Claims Liability

The False Claims Act has very specific rules regarding false or fraudulent claims submitted to the government for Medicare reimbursement. The False Claims Act allows those people who have knowledge of Medicare fraud to file suit based on the fraud against the government.  

The government might complete their own investigation and opt to intervene in the case, but under a False Claims Act case the person with inside knowledge would still be eligible to recover partial compensation as an incentive for bringing those claims.

When Has a Provider Committed Upcoding Fraud?

This practice of billing for medical services or equipment that is designated under a more expensive, and therefore more highly reimbursed amount, is upcoding fraud, if a provider submits claims with what are known as CPT codes, that represented a higher level of care than what the health care provider actually rendered.

This means that the physician or health care provider in question would have received more payment than he or she was due to receive as a result of the practice of upcoding. Since a provider is billing Medicare for a service that was not truly provided and requesting a higher reimbursement amount, an up coded claim is false claim that could be named under a False Claims Act case.

Upcoded bills can be sent to any payer, whether it is the patient, Medicare or Medicaid. Upcoding can occur when a patient receives medical procedures, diagnostic services, or otherwise visits their health care provider. Private payers and government payers all suffer the consequences of upcoding, since the cost of health care based on this is distributed among everyone, however, cases involving fraud or upcoding with Medicaid, Medicare, or Tricare could fall under the False Claims Act.

In many of these cases, someone inside the practice working on the coding or the billing aspect of the business will learn about upcoding practices, but anyone who has a reasonable belief this has occurred can serve as a whistleblower.

Filing a Whistleblower Case: Know Your Rights

The US Department of Justice has made the prosecution of medical fraud one of the top priorities in recent years, leading to many cases including those associated with upcoding. If you are whistleblower who has inside information about this practice, consider consulting with a dedicated lawyer today.       

The government would not be able to pursue as many investigations and compensation for upcoding fraud without the support of whistleblowers, but you deserve to know your rights before you come forward.

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