Upcoding in medicare: where does it matter most?

Area of Science:

• Health Economics
• Healthcare Policy
• Medical Billing and Coding

Background:

• Upcoding, defined as billing for higher complexity services than provided, has varied definitions and financial incentives across Medicare programs.
• Previous financial estimates for upcoding in Medicare Parts A and B were highly variable due to differing methodologies.
• The Comprehensive Error Rate Testing (CERT) program provides a standardized methodology for analyzing upcoding across Medicare Parts A and B.

Discussion:

• This study analyzes upcoding magnitude in Medicare Parts A and B using CERT program audit data from 2010-2019.
• Upcoding for hospitalization under Part A averaged $656 million annually (0.53% of expenditures).
• Upcoding for physician services under Part B averaged $2.38 billion annually (2.43% of expenditures).

Key Insights:

• Physician services under Medicare Part B represent a substantial portion of upcoding expenditures, estimated at $2.38 billion annually.
• Hospitalization upcoding under Medicare Part A is relatively small, averaging $656 million annually.
• Medicare Part C faces significantly higher upcoding costs, estimated at $10-15 billion annually.

Outlook:

• Standardized audit data analysis is crucial for accurate upcoding magnitude assessment.
• Findings can inform policymakers on targeted strategies to mitigate Medicare upcoding.
• Further research into Part C upcoding drivers and mitigation is warranted.