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BBT Ep. 6: The Costs of Upcoding

May 16, 202310 min read

In this episode we discuss the costly nature of upcoding and what it can mean for even a small medical practice.

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Welcome to the Better Billing Today podcast. If you're a medical service provider and you're an owner operator, we're talking to you and your staff. Together, we're creating a positive patient financial experience, streamlining your operations, and improving your cash flow. On this podcast, we're discussing topics like hiring, training, billing, practice management and payment technologies so you can keep up with the latest in the industry so that you can run your practice instead of it running you! I'm your host, Adam Welchel. I own Spark Billing services. We're bringing positive patient financial experiences to clinics just like yours.


Today we're gonna go over an article from CT Insider where a whistleblower has revealed that a Bridgeport Hospital was overbilling for six years. This hospital has settled with the attorney General's office, but the amount of money isn't as important as the topic that we're going to discuss, which is the topic of upcoding and overbilling. And it's not always black and white; sometimes the upcoding is a simple x-ray being billed as a complex x-ray.

In this case the article says that it was upcoding or Overbilling because they were saying that these services were being done by a physician instead of a mid-level, which could be a physician's assistant or a nurse practitioner. But regardless of how the upcoding or the overbilling was done, upcoding is illegal.

And I think what's interesting is that this can happen more in the larger hospitals because revenue managers, it doesn't say in the article, but revenue managers can unfortunately be incentivized to create more revenue for the hospital. And so you have to wonder, is this a case of the revenue manager working with the billing staff and saying, "I want you to code these visits that were seen by mid-levels. I want you to code these encounters as seen by physician?" But this can happen in a variety of ways. Again, it can be creating a more complex procedure, using the billing codes or changing who saw the patient.

So you're saying that they were not seen by a doctor?

In this article it says the the attorney's office said the services did not satisfy certain billing requirements and should have been billed by mid-level providers, meaning the encounters should have been coded to say that the patient was seen by something like a physician's assistant or a nurse practitioner.

The price is different.

The prices are different. Yeah. The reimbursements to the hospital are higher. When you say that a physician saw the patient for a certain procedure. What's unfortunate in these situations is revenue managers can hide behind bureaucracy and complicated billing practices so that they sometimes can get away with this and the physicians don't know what's happening, the mid-levels don't know what's happening.

And they're often incentivized to increase revenue for these hospitals. But I want to talk to the staff at a small clinic right now who may be concerned that there's upcoding happening. And in a smaller clinic like that, you have less ways to hide and more than just losing your job, you can actually face jail time if you're caught upcoding!

So anybody that's in billing right now that feels like they might be subject to pressure, to upcode, whether you're upcoding the procedure or who is seeing the patient, those two things, if somebody turns you in that's something that you would be very concerned about. There's a few things you can do.

So if you are in the medical billing space, if you're in revenue cycle management and you suspect that there's upcoding happening in your clinic or your hospital there is a resource for you. The Justice Department has a phone number. It's 1 800 HHS TIPS. So this resource is here for you because if something is happening in your clinic or your hospital and you're afraid to speak up your best bet is to protect yourself and make sure that the consumer or the patient is protected.

The government entities that are there providing this assistance for the patients, that we're not stealing money from the government, and you again, avoid jail time, avoid losing your job. This article that we referred to actually, the whistleblower had to leave the company. We don't know that they had to leave because of this, but it was reported by somebody who no longer worked at the hospital.

And they're now a realtor.

She's a realtor now. Yeah. This, it says this was going on for over a six year period of time.

Yeah. This was happening from 2014 to 2020. But yet it didn't come to surface until, 2023, maybe the report started in 2022. Who knows how long these things take. But the owners and the board of this medical group, they come out and say, we want to withhold, the best practices and compliance and the industry standards, but they had no idea this was happening.

Revenue managers have a lot of control and it seems even in large hospitals, if your audits and your compliance and your controls are not rigorously updated and scrutinized then you can unfortunately get away with overbilling.

So you're saying that perhaps the larger the organization, the easier it is for some of these things to take place and occur and maybe even hide without the knowledge of people you would think who would know?

Yeah. has an article on billing codes and how Upcoding happens. They do talk about in this article that administrators who run healthcare systems can benefit professionally when the profits of that hospital are impressive.

Unfortunately, instead of just getting more patients and using your marketing dollars and having good service, you can use upcoding as one way to increase your revenue by cheating the system. Please don't do that. Please don't do that! But you're right, they they can hide behind some of this bureaucracy and the complexities of medical billing to hide and skirt the the truth in these scenarios.

What about a small clinic? What do they take away from this?

If you're an owner operator, I would really encourage you to be aware of the potential of upcoding in your business, in your practice, because if you've ever incentivized anybody in your company to optimize revenue, that vague statement needs to be clarified and you should be auditing and have an outside firm.

Check your coding, check your billing, look at the charts and make sure that there is consistency between what's been written in the chart and what's been billed to the insurance company and these government payers. Because if you've incentivized a revenue manager to, improve the business and improve cash flow unfortunately Upcoding is one of those ways that they can do that and you may not even know.

Annual audits, even changing people's roles and just seeing what happens or bringing in new people, there's definitely ways to get under the hood. Even if you don't know medical billing, if you're the provider, you're the owner, there's resources out there. In fact, if you emailed us at, and you had questions about ways you can audit and find these inconsistencies in these illegal practices, in your firm, we can give you some recommendations.

We're obviously not an audit firm but Spark Billing Services does medical billing and so we are constantly going through our checklist to make sure that we are not upcoding on behalf of any of our clients and their providers. Let's say that's a medical billing company like Spark, were to come in and do some type of complimentary audit to a small practice.

How would they be able to detect the difference between mistakes, just general negligence and spotting, perhaps some deliberate upcoding?

So the difference between a mistake and deliberate upcoding is going to be found in the consistency and the codes that you're using. If you know that you only offer these simple x-rays or these simple procedures and you can see a consistent pattern by certain people who are charging more and upcoding, then that's a sign that there is some fraudulent activity. Now, whether it's a sign of fraudulent activity or not, it's still upcoding and that needs to be corrected either through training or termination, but it is upcoding no matter what it is, whether it's deliberate or not.

The other way to look for upcoding is to find out if the services that are, the patient's receiving not just the x-rays and the procedures, but who is seeing the patient. If you have, one physician and five mid-levels, but that all of the billing that's going to these private payers and these government payers all have physicians, or the majority of them are saying that the patient was seen by a physician; that's a big red flag. And it's the best to get these things caught sooner rather than later; catch them early, catch them fast and correct this activity.

But as a medical billing service provider our revenue managers, if they were to work with you on a consulting basis or if they're interested in bringing you on as a client we have to make sure that we're not contributing or participating in any deliberate upcoding. So we do have an audit that we do for our own safety.

But we can share those results with you obviously, because we wanna make sure that you have all the information you need if you're the owner operator and you don't know the ins and outs of medical billing and you don't know if you're incentivizing your revenue managers to unfortunately break the law and over bill these payers. There are some resources again that are gonna be in the show notes.

You can always email us at if you have a story, a question about upcoding, overcharging, and resources for how to look for this practice happening in your clinic. Next week's episode, we're going to talk about medical scheduling. And while this particular role in your practice may not be participating in fraudulent activities such as Overbilling, But they can get you in hot water.

And so we're gonna discuss the best practices for hiring and training your medical scheduler. And then in a few weeks from now, we're gonna provide a download for all of our medical schedulers and give them a guide to success and how they can make their job very effective. Also maintaining their compliance, but also being on the cutting edge of what medical schedulers are doing for our clinics and improving the patient financial experience. So as of right now that link is not in the show notes, but if you are listening to this episode a few weeks from the day that it aired, that ebook is gonna be in the attachments, in the links, in the notes of this podcast.

So thank you for joining us on the Better Billing Today podcast, where we're here to help you improve the patient financial experience. Streamline your operations and increase your cash flow. Again, I'm your host Adam Welchel, Chris at the Controls. This is Spark Billing, signing off.

In this episode we discuss the costly nature of upcoding and what it can mean for even a small medical practice.

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