Upcoding in medicare: where does it matter most?

AbstractUpcoding in Medicare has been a topic of interest to economists and policy makers for nearly 40  years. While upcoding is generally understood as “billing for services at higher level of complexity than the service actually pro- vided or documented,” it has a wide range of definitions within the literature. This is largely because the financial incentives across programs and aspects under the coding control of billing specialists and providers are different, and have evolved substantially over time, as has the published literature. Arguably, the primary importance of analyzing upcoding in different parts of Medicare is to inform policy makers on the magnitude of the process and to s uggest approaches to mitigate the level of upcoding. Financial estimates for upcoding in traditional Medicare (Medicare Parts A and B), are highly variable, in part reflecting differences in methodology for each of the services covered. To resolve this variability, we used summaries of audit data fr om the Comprehensive Error Rate Testing program for the period 2010–2019. This program uses the same methodology across all forms of service in Medicare Parts A and B, allowing direct comparisons of upcoding magnitude. On average, upcoding for hospitalization under Part A represents $656 million a nnually (or 0.53% of total Part A annual expenditures) during our sample period, while up- coding for physician services under Part B is $2.38 billion annually (or 2.43% of Part B annual expend...
Source: Health Economics Review - Category: International Medicine & Public Health Source Type: research