Up-Coding, Under-Coding, Right-Coding – Medical Billing Audits what does it all mean? All medical providers receive requests from Medicare or Medicaid entities to provide documentation to review the accuracy of the coding. These inquiries may result in paybacks or recoupment of funds and/or informational letters describing the nature of the findings.

Large health care entities such as hospitals and large clinic systems have full time positions for chart reviews and audits. These may have the scope of clinical, billing, or both. What about the small or mid-sized independent clinics? They may have one biller internally or they may outsource their billing. Audits should never be done by the same entity or individual coding the claims.

Audits might reveal a pattern of up-coding OR under-coding. An example of this would be – office visits traditionally follow a bell curve pattern with the office visit options between 1-5. Most visits traditionally are level 3 visits with one standard deviation for level 2s and 4s and another standard deviation for levels 1s and 5s. This is just a basic overview – see table below.

As seen in the graph above, there may bean opportunity for the provider to capture additional revenue by training on documenting the complexity of their medical decision making, the elements of the comprehensive exam, and a detailed history and review of chronic diseases and systems.

“Up-coding” is a form of fraud and could result in large fines and possibly jail time for providers and participating parties such as medical billers. If the bell curve is too far to the right – towards levels 4s and 5s, this may indicate to payers, documentation may be needed to substantiate the coding. However, as this diagram depicts, there are times when under coding happens. Some providers do this to “fly under the radar.” That mentality may backfire especially if the provider is a specialist. If other providers in the same specialty are heavier on level 4s and 5s and your provider group is heavy on level 1s and 2s – not only are you missing out on revenue, but third-party payers are also reviewing this data to determine continuation on their medical panels (in-network provider status).

FinanSynergy offers an unbiased third-party audit service for billing and coding to help medical practices identify areas to strengthen for documentation, coding, and reimbursement. CONTACT US for more information and to get your audit scheduled. Call Katie Fergus, CPA 515.635.5531 or email katie@finansynergy.com

Visit our website as well to learn about our other services. THANK YOU!