UPCODING MEDICARE: IS HEALTHCARE FRAUD AND ABUSE INCREASING?

Area of Science:

• Healthcare Economics
• Medical Billing and Fraud
• Public Health Policy

Background:

• Medicare fraud, particularly upcoding, resulted in substantial financial losses, estimated at $60 billion in overpaid claims in 2015.
• Upcoding involves healthcare providers assigning more severe diagnostic codes than documented to increase reimbursement rates.

Purpose of the Study:

• To evaluate the impact of Medicare and Medicaid fraud on healthcare reimbursements.
• To quantify the extent of upcoding in both inpatient and outpatient claims within these programs.

Main Methods:

• A comprehensive literature review was conducted to analyze existing data on healthcare fraud.
• The review focused on physician upcoding related to present on admission infections, diagnostic related groups, emergency departments, and clinics.

Main Results:

• Upcoding practices were found to significantly influence Medicare payments and contribute to overall fraud.
• Fraudulent activities, specifically upcoding, have escalated for ambulatory inpatient and outpatient services utilized by Medicare and Medicaid beneficiaries.

Conclusions:

• Upcoding is a major driver of Medicare and Medicaid fraud, leading to significant financial overpayments.
• The study underscores the pervasive nature of upcoding across various healthcare settings and claim types, necessitating robust fraud detection and prevention strategies.