Medical coding provides several important functions in healthcare. One of the main functions is to translate procedural and diagnostic information performed by healthcare providers from medical record documents such as physician notes, laboratory and radiologic results. Medical coders ensure that procedure and diagnosis codes are applied correctly for reimbursement by creating a claim to be paid by insurers. While this may seem like a seamless process, coding the medical conditions and procedures performed can be an extremely difficult and time-consuming task for a variety of reasons, resulting in coding errors. Whether the coding errors have been done due to carelessness or a desire to increase reimbursement, it’s important for payers to have an effective payment integrity solution in place in order to ensure that the reimbursements paid are proper and complete.   Let’s review some of the more common coding errors that need to be identified.

Upcoding

Upcoding can be facilitated by the submission of a diagnosis code, a procedure code, or both.  For example, if a procedure code is time-based and the provider submits a code whose support requires face-to-face time greater than the provider spent with the patient, or if the provider did spend that face-to-face time with the patient, but its extent wasn’t necessary based on the severity of their illness, the procedure has been upcoded.

As an example of surgical upcoding, let’s look at surgical repair of an abdominal hernia. Code 49591 is for a repair up to 3 centimeters (cm) in length, whereas 49593 is for a repair more than 3 cm and less than 10 cm. The value of these based on Context⁴ Healthcare’s usual and customary database (UCR) for the Chicago suburbs is $14,324.10 for 49591 and $18,864.54 for 49593 (at the 80^th percentile).

Is this example of upcoding “fraud”? That’s for law enforcement to decide. But it certainly is abusive to bill the wrong code because of the length of the repair. Coding 49593 when it should be 49591 results in a significantly different payout. Enough of this in a health plan, and a lot of assets are wasted.

When a provider submits a diagnosis code appropriate for more severe conditions than exists for the patient, the diagnosis code has been upcoded. On inpatient and outpatient claims, upcoding can significantly increase reimbursement. For example, a patient did not meet criteria for sepsis treatment for that inpatient stay, yet the provider documented it as such, and that translated to the supportive diagnoses coded on that inpatient facility claim. The provider received payment for a higher DRG than was appropriate for the hospital stay due to upcoding of diagnosis.

Unbundling 

Another common erroneous coding scenario is unbundling. This is when a provider bills multiple codes that represent all the components of a procedure separately, even though there exists one code that encompasses all individual procedures. Frequent unbundling claim coding errors may look like the provider is attempting to seek higher reimbursement.

The main sources that determine services that are bundled come from both the American Medical Association (AMA) and the Centers for Medicare & Medicaid Services (CMS). The AMA has created a number of “panel” codes that consist of multiple pathology/lab procedures which can be performed separately but are often ordered together. As an example, CPT 80048 (Basic metabolic panel – Calcium, total) consists of the following separate CPT coded tests: 82310 (Calcium, total), 82374 (Carbon dioxide bicarbonate), 82435 (Chloride), 82565 (Creatinine), 82947 (Glucose), 84132 (Potassium), 84295 (Sodium), and 84520 (Urea Nitrogen BUN). The UCR for the panel is $70.07, while the combined UCR for the components is $192.15, a big difference and is detrimental to the health plan if it happens a lot. Performing those eight tests and billing them separately instead of billing 80048 is unbundling, and the payer should reject it. Performing as many as seven of the eight and billing them separately is not unbundling under acceptable coding guidelines. Your editing solution better know the difference.

CMS publishes quarterly date-of-service (DOS)-specific National Correct Coding Initiative (NCCI) procedure-to-procedure edits which identify pairs of codes that are not typically coded together.  These pairs are based upon analysis of associations between all necessary procedural components of the two codes in each pair, their efficiency when performed together, and any other secondary related work deemed not significant.   CMS dictates where a specific modifier can be used to bypass an NCCI bundling edit. Coding errors can at low frequencies cause NCCI code pairs to be billed and modified when the medical records do not support it.  Perhaps the coder failed to understand the documented scenario in the context of bundling edits or did not take into consideration if the payer followed NCCI edits. However, a pattern of NCCI code pair submission with bypass modifiers at high frequency can be the result of a fraudulent attempt by the provider to intentionally gain reimbursement for codes that would otherwise not be reimbursed separately. 

A basic example of NCCI-based unbundling is when a surgeon bills for an open appendectomy without rupture (CPT 44950) and on the same DOS separately bills and modifies an exploratory laparotomy (CPT 49000).  When a provider opens a patient’s peritoneum and on the same encounter, removes the appendix, the work of performing the second procedure is included in the valuation of the first, and so should not be billed separately. A modifier is allowed to bypass this NCCI bundling edit to allow for some atypical scenarios – for example when a patient has multiple surgeries on same DOS - but when such a scenario is not documented in the medical record, it is unbundling.  Misunderstanding an NCCI edit can contribute to unbundling at the coding level as can misinterpretation of the provider’s documentation. 

Unsupported Procedure Codes

If a coder does not understand a procedure and its necessary components, they can make the coding error of submitting a claim for unsupported procedures. From complex physician notes, a coder can fail to appreciate a portion of the documentation and code it in error. This can often occur when diagnostic procedure codes are billed on the same DOS as therapeutic procedures. There are encounters where a diagnostic procedure is performed (like an imaging study), resulting in the need to perform a therapeutic service in the same body site on the same DOS. Separate coding of the diagnostic study in the same encounter as the therapeutic service is appropriate when the diagnostic service generated new clinical information of significance, but when the imaging was performed only to identify the known location previously diagnosed, with intent simply to target the therapeutic procedure, it is not appropriate to bill this separately.

Coding Waste vs. Fraud

Upcoding, unbundling, and billing for unsupported procedures can be the unintentional result of bad coding, or it can be the intentional result of wanting to increase a reimbursement by coding for actual services rendered in a way that is intended to increase reimbursement. Neither of those things are technically “fraud”. This is where the “waste” and “abuse” part of FWA comes in.

An FWA report is a good monitor for such patterns. If suspicious claim patterns are found, audit a sample of the provider’s medical records to determine whether such aberrant patterns are a sign of abusive billing or whether the cases are supported.

Context⁴ Healthcare is a member of the National HealthCare Antifraud Association (NHCAA). As a supporting member, we constantly contribute information to the NHCAA community, and are vigilant of new information from that community in order to capture FWA code patterns emerging in our industry. We lead the way with the design of our FWA edits, reports, and data extracts to identify potential FWA patterns for our customers.

In this risky healthcare environment, all Health Plans must protect against FWA with a current and effective Payment Integrity plan. This must include a comprehensive set of FWA edits along with analytics that identify aberrant patterns over a period of time. Context⁴ Healthcare offers an extensive suite of medical and dental edits of broad range and scope that are updated weekly by a dedicated department of certified coders, certified Registered Health Information Technicians (RHITs), and experienced billers. Our edits are designed to flag bad coding patterns of various classifications, including documentation errors, audit risk errors, procedure/diagnosis linkage errors, utilization errors, regulatory errors, as well as a large array of technical errors. 

For more information on C4H’s Payment Integrity platform, visit our website here: https://www.context4healthcare.com/solutions/payment-integrity/medical-payment-integrity

If you seek an up-to-date, intuitive, advanced medical coding software tool to help minimize coding related errors, this webpage contains information about Codelink^R Online: https://www.context4healthcare.com/health-industries/systems/advanced-medical-coding-software

For additional topics related to ‘bad coding’ in healthcare fraud, read some of our past blogs with topics that relate to coding here: https://www.context4healthcare.com/posts/c4h/2023/09/13/monitor-potential-fwa-overutilization-of-high-level-codes

https://www.context4healthcare.com/posts/c4h/2023/08/03/mole-removal-claim-fraud-nets-jail-and-fines

https://www.context4healthcare.com/posts/c4h/2021/04/27/fighting-fraud-in-medical-nutrition-therapy