What is “upcoding”?

Every procedure performed by a doctor, nurse, or other healthcare provider is associated with a five-digit alphanumeric “Current Procedural Terminology code” (“CPT code”) assigned by the American Medical Association. When a hospital or medical practice submits a reimbursement request to Medicare or a state’s Medicaid plan, it includes the CPT code(s) for the treatment the patient received.

It also includes the National Provider Identifier (“NPI”) code of the physician who provided the treatment or, if no physician was involved, the NPI of the nurse practitioner or physician’s assistant who did so. The NPI is a 10-digit number unique to a single practitioner.1 The CPT code for a more complex procedure is associated with a higher reimbursement rate than the CPT code for a simpler procedure. The same is true of a physician’s NPI code compared to the code of a physician’s assistant, with the physician’s services being reimbursed at a higher rate than those of other providers.

“Upcoding” – or simply “miscoding” – is a common class of fraud in insurance reimbursement claims by healthcare providers. Upcoding affects both private insurers and governmental health insurance programs such Medicare, Medicaid, and TriCare.2 Where one of those federal programs is overcharged, the False Claims Act (“FCA”) allows the U.S. government civil penalties of $11,665 to $23,331 for each instance of false billing plus three times the amount of the total overcharging.3 A whistleblower can file a “qui tam” lawsuit on the government’s behalf and, if successful, is entitled to 15% to 30% of the government’s recovery.4

What are some common upcoding schemes?

Three of the most common examples of upcoding schemes are:

  • Misrepresenting the licensure or credentials of the medical professional who provides treatment
  • Misrepresenting the level of treatment provided
  • “Unbundling”

Misrepresenting the licensure or credentials of the medical professional who provides treatment

An unscrupulous medical practice may enter a physician’s NPI code as if the doctor has seen the patient, when in fact a nurse practitioner or physician assistant saw the patient without a physician, because insurers typically reimburse a physician encounter at a higher rate than an encounter with other medical staff.

When a procedure, diagnosis, or visit can be done by an NP or a PA, he or she is allowed to bill Medicare at just 85% the rate of a physician.5 A nurse practitioner’s encounter with a patient may be billed at the full physician’s rate only if the physician is physically present in the same suite for immediate consultation.

When the physician is not in such close proximity, billing at the full rate for services by a nurse practitioner or physician’s assistant is a type of upcoding that violates Medicare billing guidelines and the False Claims Act.6

Misrepresenting the level of treatment provided

Upcoding frequently involves the CPT code. A simple example: A patient’s five-minute visit with a nurse practitioner or physician’s assistant with no other treatment, tests, or diagnoses should be coded as “99211”, according to AMA and Medicare/Medicaid guidelines.7 A fifteen-minute visit with a physician and detailed discussion of the medical issue is coded as “99213”.8 If a physician’s assistant sees a patient for five minutes without discussing the patient’s medical history, and the office manager sends the patient’s insurer a request for reimbursement with the code “99213”, then that is an example of upcoding and possibly fraud.9

But FCA cases often involve much more technical distinctions. In one case, a federal court held a diagnostic clinic liable in March 2020 for repeatedly upcoding a procedure used to diagnose glaucoma, a buildup of fluid in the eye that puts pressure on the optic nerve and causes temporary and sometimes permanent blindness.10

The clinic diagnosed glaucoma via “tonometry”, a procedure that measures the pressure of fluid in the eye, which carries the CPT code “92100”. But the clinic regularly billed Medicare for a more expensive procedure called “tonography”, CPT code “92120,” which measures the rate at which fluid leaves the eye when the eye is pressed. The distinction between the two can come down to where pressure is being measured and how, so it isn’t hard to see how medical professionals might disagree with one another.

But the whistleblower in that case, a doctor for the clinic, had shown its medical director formal opinions from the American Optometric Association and American Academy of Ophthalmology, which agreed that the clinic’s procedure qualified as the less-expensive tonometry, and yet the clinic persisted in billing for the more-expensive tonography.

“Unbundling”

Another common scheme for overcharging insurers is “unbundling”. Some procedures with multiple components “bundled” together are assigned a single CPT code. The rates that Medicare and many private insurance companies have agreed to pay for that procedure are typically lower than the sum of the rates when the components are billed with separate CPT codes as multiple procedures.

Billing the insurer for the components as multiple procedures is known as “unbundling” and can be a violation of the FCA.11

How do I report suspected medical billing fraud?

Medical billing fraud can be reported in a variety of ways. Where the insurer being defrauded is a federal program such as Medicare, Medicaid, or TriCare, the FCA allows a whistleblower to sue on the government’s behalf.

A whistleblower lawsuit must be filed “under seal”; that is, it does not immediately become public. Federal and/or state attorneys investigate the allegations. The defendant is not notified or required to respond during this time. For Medicaid, a joint federal-state program, the whistleblower can sue on behalf of both the United States and North Carolina (or other relevant state).

Do I need an attorney for reporting health insurance fraud?

You can report health insurance fraud on your own, but there are numerous reasons to engage an attorney. An experienced qui tam attorney can help try to persuade federal and/or state attorneys to bring in the government as an active party, which increases the lawsuit’s chance of success.

An experienced qui tam attorney can help you investigate the fraud so that an FCA lawsuit you file contains the right type of information and gives proper notice to the relevant government agency, steps that are crucial to ensuring that you are compensated for your efforts and the risk you take by speaking up, if the lawsuit is successful.12 In short, a whistleblower is rarely able to navigate the FCA’s complexities and litigate a case to success on their own.

An experienced FCA attorney can also advise you on the FCA’s anti-retaliation provisions as well as state and federal laws aimed at limiting the legal liability of a whistleblower who was involved in an employer’s false claims for payment.13

Are You Aware of a Pattern of Upcoding?

Upcoding costs government programs and private insurers billions of dollars each year. Whistleblowers in the industry – including doctors, nurses, and contractors – initiate most of the qui tam lawsuits that expose and redress such fraud against federal and state governments.

Please contact us if you have seen evidence of this type of fraud against the federal or state government. We can help you move forward with a whistleblower/qui tam claim. We appreciate the struggle you may be facing. That is why we are discreet and have a You-First policy. We will help you try to take advantage of appropriate federal and state law that protects you from employer retaliation and – if you were involved in your employer’s fraud – may also protect you.

Contact us or call 1-844-520-2889.

If we decide to take your case and you don’t get a reward for reporting fraud, you owe us nothing.

1 See, e.g., Ctrs. for Medicare & Medicaid Servs., Nat’l Plan & Provider Enumeration Sys., https://npiregistry.cms.hhs.gov/registry/provider-view/1023451861 (showing NPI for U.S. Surgeon General Vivek Murthy); see Am. Compl. ¶¶ 1215, United States ex rel. Sonyika v. Apollo MD, Inc., 1:20-CV-03213-AT (N.D. Ga. Oct. 27, 2019), ECF No. 45, available at https://media.bizj.us/view/img/11830834/us-vs-apollomd-amended-complaint.pdf.

2 See, e.g., United States ex rel. Scott v. Arizona Ctr. for Hematology & Oncology, PLC, 16-CV-03703, 2020 WL 2059926, at *6 (D. Ariz. Apr. 29, 2020) (denying summary judgment by medical practice that allegedly overbilled both Medicare and private-pay insurers).

3 31 U.S.C. § 3729(a)(1)(G); Fed. Civ. Penalties Inflation Adj. Act of 1990, PL 101–410, October 5, 1990, 104 Stat 890 §§ 45; 28 C.F.R. § 85.5.

4 31 U.S.C. § 3730(d).

5 Ctrs. for Medicare & Medicaid Servs., Medicare Claims Processing Manual, Ch. 12 §§ 110, 120, https://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/Downloads/clm104c12.pdf (Rev. Mar. 12, 2021); United States ex rel. Sonyika v. ApolloMD, Inc., 1:20-CV-03213-AT, 2021 WL 1222379, at *5 (N.D. Ga. Mar. 31, 2021); Letter from Mandy Cohen, N. Carolina Sec. Health & Hum. Servs., to Davida R. Kimble, Acting Dep. Dir., Div. Medicaid Field Ops. South, Ctrs. for Medicare & Medicaid Servs. 3 (June 16, 2020), https://files.nc.gov/ncdma/documents/files/NCSPA20-0007-b.pdf (seeking re-approval of North Carolina’s reimbursement rate schedule); see generally, e.g., 21 N.C. Admin. Code 32M.0102, 32M.0110 (North Carolina regulations defining scope of nurse practitioners’ practice and requiring periodic consultation with and supervision by physician).

6 United States ex rel. Sonyika v. ApolloMD, Inc., 1:20-CV-03213-AT, 2021 WL 1222379, at *511 (N.D. Ga. Mar. 31, 2021); see Medicare Payments Advisory Comm’n, Improving Medicare’s payment policies for Advanced Practice Registered Nurses and Physician Assistants (Feb. 15, 2019), http://medpac.gov/-blog-/the-commission-recommends-aprns-and-pas-bill-medicare-directly-/2019/02/15/improving-medicare’s-payment-policies-for-aprns-and-pas.

7 85 Fed. Reg. 84,585 (Dec. 28, 2020) (Final Rule & Interim Final Rule); Am. Academy of Prof’l Coders, CPT 99211, https://www.aapc.com/codes/cpt-codes/99211 (viewed Apr. 16, 2021); United States ex rel. Salters v. Am. Fam. Care, Inc., 262 F. Supp. 3d 1266, 1283 (N.D. Ala. 2017).

8 85 Fed. Reg. 84,585 (Dec. 28, 2020).

9 See United States v. Specialist Doctors’ Grp., LLC, 8:17-CV-2647, 2020 WL 7138566, at *1 (M.D. Fla. Dec. 7, 2020).

10 United States v. Outreach Diagnostic Clinic LLP, 12-CV-0480, 2020 WL 1272609, at *12 (S.D. Tex. Mar. 16, 2020).

11 United States ex rel. Salters v. Am. Fam. Care, Inc., 262 F. Supp. 3d 1266, 128486 (N.D. Ala. 2017). On the defendant’s motion for summary judgment, the court dismissed the relator’s claims regarding three alleged types of unbundling and allowed the case to proceed to trial on a fourth type of unbundling.

12 See 31 U.S.C. § 3730(e)(4) (barring actions based on publicly disclosed information); 31 U.S.C. § 3730(d) (establishing whistleblower’s eligibility to federal government’s recovery.

13 See 31 U.S.C. § 3730(h); N.C. Gen. Stat. §§ 1-613; 108A-70.15.

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