Jun 4, 2025

Upcoding Unbundling Fraud

Understanding Upcoding and Unbundling in Medical Billing

Medical billing can be complex, and unfortunately, some providers engage in fraudulent practices to increase their reimbursement from insurance companies or government programs. Two common types of billing fraud are upcoding and unbundling.

What is Upcoding?

Upcoding occurs when a healthcare provider submits codes for more expensive services or procedures than were actually performed. This results in higher payments than the provider is entitled to receive.

What is an example of Upcoding fraud?

For example, if a patient receives a routine office visit, but the provider bills for a comprehensive exam, this is considered upcoding. The provider is paid more than they should be for the service actually rendered.

What is Unbundling?

Unbundling is the practice of billing separately for procedures that are normally covered by a single, comprehensive code. By breaking up the services, providers can receive higher total payments.

What do the terms upcoding and unbundling mean?

Upcoding and unbundling are both forms of medical billing fraud. Upcoding involves billing for more expensive services than were provided, while unbundling involves billing separately for services that should be billed together under one code.

What is an example of unbundling fraud?

For example, if a surgical procedure includes anesthesia and post-operative care as part of a single code, but the provider bills for each component separately, this is unbundling fraud.

What is an example of unbundling in medical billing?

Another example of unbundling in medical billing is when laboratory tests that are typically grouped together under one code are billed individually to increase reimbursement.

Why Are These Practices Problematic?

Both upcoding and unbundling are illegal and can lead to significant penalties, including fines and exclusion from federal healthcare programs. They also contribute to higher healthcare costs for everyone.

Upcoding Unbundling Fraud