Medical Coding Company Solutions to Avoid Upcoding and Undercoding Errors

Is your medical practice still questioning the importance of internal coding audits? Upcoding and undercoding may be the hidden causes of compliance issues, making regular internal audits essential. So now what is upcoding and undercoding?

Upcoding is mostly a form of coding fraud where coders bill for a higher-level, more complicated, or more expensive service than what was performed to increase reimbursement. On the other hand, undercoding at times refers to assigning lower-level codes to services rendered due to lack of training or poor documentation. Both can negatively affect compliance and revenue.

This is why partnering with an expert medical coding company like SunKnowledge can be beneficial for you. These experts have professional certifications, specialized knowledge and expertise which allows them to reduce coding errors and strengthen compliance with payer and regulatory requirements. This ensures more accurate reimbursement and stronger revenue-cycle performance

What are upcoding and undercoding?

Upcoding and undercoding both create significant compliance risks. Upcoding uses higher level codes than warranted and increases the risk of legal penalties. Persistent undercoding can reduce reimbursement and distort utilization, quality and risk data. In either case, healthcare professionals are subject to revenue loss. To understand the complex nuances of these coding errors, an example can be considered. Code 99215 captures a 40 to 45-minute end-to-end patient evaluation and management in the physician’s office.

Considering that in a certain case a 10-minute examination was conducted to evaluate the patient’s medical situation. Will the code 99215 be applicable in this case? The answer is negative. However, if this code is used in such a case, whether intentionally or due to gaps in knowledge, then it can lead to upcoding. On the contrary, if for 40–54 minutes of qualifying total time for an established-patient office visit, the coder uses the code 99212 which denotes 10 minutes of evaluation, then it can lead to undercoding. An expert medical coding company has a thorough understanding of these nuances, which enables them to ensure accuracy in all submitted claims.

Common causes of upcoding and undercoding in US healthcare

Some of the most common practices that lead to these coding errors are mentioned below:

Upcoding: Cause behind the error

• Intentionally assigning higher: level CPT or ICD-10 codes to increase the reimbursement amount for services not fully rendered or necessary.
• Due to improper or incomplete documentation carrying sufficient details, coders could be made to rely on assumptions of clinical situations, leading to high level coding.
• Pressure to meet RVU or relative value unit targets can also lead to upcoding.
• Inaccurate EHR templates or even outdated billing software can lead to coding errors like upcoding.
• Billing procedures separately which are supposed to be bundled together are a significant upcoding practice.
• Gaps in coding expertise among professionals can also lead to missing or inappropriate modifier usage, which can lead to upcoding.

Undercoding: Cause behind the error

• Like upcoding missing, incomplete, or ambiguous documentation forces coders to select a lower-level code to ensure accuracy, causing lost revenue.
• Coders may be unaware of shifting coding regulations which allow for higher billing. This can lead to outdated lower-level code applications.
• Lastly, providers can also sometimes assign lower-level codes intentionally to avoid facing payer scrutiny.

Irrespective of these reasons, the consequences of such errors are enormous and leave a long lasting impact on healthcare revenue cycle management. This is why partnering with a professional medical coding company is a must.

Compliance and Financial Consequences of upcoding and undercoding

Healthcare coding compliance is a must for proper reimbursement. Upcoding and undercoding both carry intense legal and financial risks, and they are considered some of the most significant medical coding errors. The most noteworthy aspect here is that it might violate certain regulations by misinterpreting the services provided, which compromises the integrity of the electronic protected health information (ePHI).

This leads practitioners to face huge amounts of legal and financial consequences. Firstly, upcoding directly violates the False Claims Act (FCA), which is a US federal law used to combat fraud against government, and can lead practitioners to face major financial penalties.

Apart from this, it directly violates the Health Care Fraud Statute (18 U.S.C. § 1347). This law safeguards all insurance payers; governmental and commercial ones alike. It prohibits fraudulent activity involving any health care benefit program, like upcoding to obtain higher reimbursement. In general, violations of this legal norm can lead practitioners to face major financial fines or up to 10 years of imprisonment.

Additionally, Medicare and Medicaid have separate regulations. For example, upcoding in Medicaid and Medicare claims can lead violators to face Civil Monetary Penalties (CMP). Under this system, providers can face fines of $15,000 per individual service, with penalties reaching up to $100,000 per violation if intentional.

On the other hand, undercoding will not only cause practitioners to lose reimbursement by ineffectively capturing services rendered, but they may also face compliance risks related to False Claims Act. Additionally, undercoding by omitting healthcare information that can influence payment determination negatively may be perceived as false or fraudulent representations of the services provided. Furthermore, it may lead practitioners to be subjected to multiyear government mandated compliance monitoring.

The impact of the legal consequences on the financial health of medical professionals can be repulsive. This is why hiring experts who provide a medical coding solution is a must.

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How Medical Coding Services Tackle Upcoding or Downcoding?

Best practices used by expert medical coding company to Prevent Upcoding and Undercoding

Ensuring coding accuracy in healthcare claim submissions requires proactive involvement from practitioners. Some of the best practices include:

• Conducting regular audits for instance, quarterly to identify frequent error patterns and determine strategies to resolve the same.
• Hiring certified coders and providing continuous training to enable them to stay updated on payer specific coding regulations; for instance, annual coding updates and modifier requirements.
• Ensuring detailed documentation is collected, meaning clear, and comprehensive clinical reports that properly capture patient diagnoses and services rendered.
• Eliminating copy-paste practices in EHR, like cutting and pasting notes from previous visits, which often causes upcoding.
• Considering these practices through the help of an expert medical coding company. As it can significantly reduce revenue leakage due to compliance issues.

How SunKnowledge Supports Coding Accuracy

When it comes to coding, SunKnowledge is known to be the top medical coding company in the industry. With over 17 years of experience, we have gained much traction over how the industry works which can be used to your advantage.

We at SunKnowledge have access to certified coders, who have a deep understanding of strict coding requirements. For example, our experts ensure 99% coding accuracy and 97% first pass claim collection rate in all our claims. To maintain such streaks, we ensure the accurate use of service code, diagnosis code, modifiers, and place of service code. Not only that, but we are also a 100% HIPAA compliant agency, which allows us to adhere to most legal parameters. This safeguards healthcare practitioners against the legal consequences of fraudulent coding practices like upcoding and undercoding.

Additionally, we at SunKnowledge make sure to follow up on rejected claims within 24 hours. We conduct detailed analysis, identifying root causes of rejection, for example any coding errors, and promptly resolve the issue through reworks and adjustments. This is indicative of our depth of expertise and prompt management of billing cycle practices.

Lastly, we are proud to mention that all these services we only charge $7/hour, which is the lowest price for medical coding company in the industry. This way, we reduce 80% of your operation costs by eliminating the need for internal billing staff management and training.

If you are also facing legal consequences due to coding errors like upcoding and undercoding, then we are your best choice. Book your no commitment call today.