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Upcoding May Lead to Unnecessarily Higher Hospital Bills

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By Phil Cohen

Notwithstanding valid questions raised by some in the blogosphere, Eric Michael David’s op-ed in The Wall Street Journal about his son’s “$20,000 bruise” does highlight an important issue in hospital billing that can have a devastating impact on patients’ out-of-pocket costs: upcoding.

Upcoding is the use of an inaccurate billing code to a medical visit, procedure, or treatment in order to inflate the reimbursement from the payer. One example is to assign billing codes for anesthesia to a natural birth. The practice is illegal, but many providers are still able to upcode with near-impunity due to patient ignorance and insurers’ unwillingness to squabble over comparatively small charges (to them).

Unfortunately, we all suffer from the effects of upcoding – even if it hasn’t happened to us personally. Patients who receive invoices with upcoded treatments may end up paying more out-of-pocket once their insurer has covered their share, and are also at risk for improper treatment in the future due to inaccurate conditions that may be added to their medical history. For the rest of us, upcoding costs us tax dollars (for Medicare and Medicaid reimbursements) and higher insurance premiums so third-party insurers can offset their costs.

As Dr. David points out in his op-ed, it can be fairly tricky to navigate hospital billing and coding effectively. However, patients can be on the lookout for irregularities and potential upcoding by paying careful attention to their Estimate of Benefits (EOB) statements and promptly following up on questionable items.

On a larger scale, the continued practice of upcoding is one symptom of the continued dysfunction of the American health care model. Patient diligence is important, but it will take fundamental shifts in incentives and billing practices to end the practice of upcoding once and for all.

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Phil Cohen

About the author

Philip Cohen is the founder and President of PRN Funding, LLC. PRN Funding is an extraordinarily focused niche player in healthcare funding. With years of…... Read More

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