Focus on Fraud: Upcoding

If you are a regular reader of this blog, you are well aware that Medicare fraud is a serious problem that costs our nation billions of dollars each year. Understanding health care fraud and the many forms it can take is essential to fighting it, especially since private whistleblowers often alert the government to cases of fraud and even help pursue wrongdoers through lawsuits called qui tam actions. In this post, our California fraudulent health care billing lawyer discusses one of the most prevalent types of fraud – upcoding. While even a one-time choice to charge Medicare for a more expensive service than that provided is fraud, upcoding becomes an even greater threat when it is a matter of routine and a practice encouraged by a company looking to put profit above patient care.

A Basic Overview of Upcoding
The Patient Empowerment section of the About.com website provides a brief, patient-oriented discussion of upcoding. As the article explains, medical providers use numbers called CPT codes (“current procedural terminology”) to bill insurance providers, including Medicare and Medicaid, for each service they provide to a patient. Each CPT codes is tied to a service and the amount that the provider will be paid for performing it. Upcoding is the practice of using a CPT code that commands a greater payment than the proper code would elicit. For example, a doctor may have performed a quick check up but bill using the code for an expanded check up, resulting in a higher payment from Medicare than is actually appropriate. Upcoding is fraudulent and illegal, costing the taxpayers money and also endangering the health of individual patients by building a false medical record.

Two Case Studies
cash2.jpgLast week, The Nashville Post reported on the settlement of a case involving alleged upcoding violations. First Call Ambulance was accused of falsifying the need for ambulance services and upcoding the services provided, billing Medicare for advanced life support treatments when only basic life support was provided. The company agreed to pay $500,000 to settle the claims and agreed to certain compliance measures to reduce the chance of future violations.

A more extensive case is documented in a Medscape article (note: the site is members-only, but Googling the article’s title may help if the provided link doesn’t work) titled “Huge Upcoding Scheme Alleged in Physician House-Call Company.” According to a federal investigator, in 2007, the company’s CEO Dike Ajiri received an email from a doctor containing “advice” on billing Medicare for house calls. The email focused on visits to established patients which could be coded at any of 4 possible reimbursement levels, garnering between $54 and $174. The criminal complaint filed against Ajiri and one company doctor alleged rampant upcoding of such visits. A typical home visit made by company doctors addressed routine matters and lasted between 10 and 30 minutes. Nonetheless, the company invariably billed Medicare using CPT codes associated with more complex visits that last 40 to 60 minutes. Ajiri allegedly told his physicians not to even use the lower-paying codes, referring to one of the two higher codes as the “default.” The company billed almost $34 million on the higher two codes from 2006 to 1010. An FBI press release elaborated, noting that 93% of established patient visits were filed under the highest code. The complaint suggests the vast majority of those billings were fraudulent.

Furthermore, one provider reported a fruitless attempt to confront Ajiri about back office upcoding, the practice of changing a lower code (used by the provider) to a higher level code after the fact. Another report said Ajiri wanted three diagnoses listed on the paperwork for all visits in order to justify a higher code and encouraged doctors to tack on a third if they had only listed two diagnoses initially. While upcoding was the primary issue, the complaint also alleged other forms of fraud such as improperly certifying patients as home-bound when they were too active and ambulatory for that classification.

The Essential Role of Private Whistleblowers
It was former and then-current employees of Mobile Doctors who alerted federal investigators to fraudulent billing practices at the company. This reflects the importance of whistleblowers in the fraud fight. Whether you are an employee or even a patient, if you are aware of upcoding by a provider and/or company, you needn’t fight the fraud alone. Our California upcoding law firm, led by San Francisco whistleblowers’ attorney Gregory Brod, can help protect your interests while combatting the fraud. In addition to doing the right thing and helping protect our nation’s health care system, you may also be entitled to a substantial monetary award for your time, effort, and bravery.

See Related Blog Posts
When a Seemingly Harmless Editing Tool Can Contribute to Medicare Fraud
The Many Guises of Medicare Fraud: Part I

(Photo by Nic McPhee)