What Is Medical Coding Fraud?

Medical coding assigns numerical and alphanumerical codes to patient diagnoses and procedures for reimbursement purpose. Submitting incorrect coding and billing information is considered fraud and may be punishable by fines.

Incorrect Codes

• Assigning incorrect codes for diagnosis and procedures is considered fraudulent because it is a misrepresentation of patient services.

Unbundling

• In some coding systems, there is one code for multiple procedures. For example, one operation code may include incision, insertion of a tube and the operation. Billing three separate codes for a procedure covered by one code is considered fraudulent “unbundling.”

Upcoding

• In many cases, the more complications the patient experiences, the higher the reimbursement. “Upcoding” is a fraudulent method of choosing codes for complications that did not exist to receive more money.

Double Billing

• Submitting a single billing code multiple times when the procedure was performed only once is fraud. Using a bundled code when only a single procedure was performed is also fraudulent.

Penalties

• Under the government’s 1986 False Claims Act (FCA), those charged with fraud may be assessed fines of $5,500 to $11,000 per claim.