Defending Against Allegations of Healthcare Claim Up-Coding

Healthcare providers today face increasing scrutiny over their billing and coding practices. With advanced data analytics, government regulators and private payers can more easily spot irregularities that may indicate improper coding and billing fraud. If your practice receives an audit letter or is being investigated for alleged up-coding, it’s essential to consult experienced legal counsel right away.

What is Up-Coding?

Up-coding refers to a provider billing for medical services at a higher code than what is actually justified by the service rendered or documented in the medical record. For example, billing a 30-minute doctor visit as a higher-level 45-minute visit. Up-coding is viewed as a form of healthcare fraud since the provider gets reimbursed at a higher rate than appropriate.

Common types of improper coding that can appear as up-coding include:

• Billing too high of an Evaluation and Management (E/M) code for the documented work
• Unbundling codes instead of billing a more comprehensive code
• Using diagnosis codes not clinically supported to justify higher reimbursement
• Reporting incorrect units of service
• Billing services not actually rendered

While improper coding can sometimes result from simple errors or a lack of coder training, regulators treat up-coding very seriously as potential fraud. Even if unintentional, providers can face stiff penalties. That’s why it’s critical to address any coding concerns right away.

Responding to an Audit or Investigation

If your practice receives a letter from Medicare or another payer requesting records for a coding and billing audit, don’t panic. Not all audits end with findings of improper billing. However, you need to respond completely and on time to all record requests. An experienced healthcare attorney can help manage the audit response.

If investigators show up unannounced at your office with a search warrant related to billing fraud, you will want legal representation right away. Don’t answer questions or volunteer information before discussing the matter privately with your attorney. You have the right to speak first with counsel.

In both situations, your attorney can help assemble documentation, review billing records, and prepare explanations showing your coding and billing practices were appropriate. With their guidance, you can demonstrate good faith efforts to comply with all requirements.

Using Data Analysis in Your Defense

Sophisticated data analysis is now used both to detect and defend against healthcare fraud allegations. Advanced statistics can identify anomalies that prompt audits and investigations. But these same tools can also reveal normal variations that disprove allegations when properly applied.

Your attorney may recommend conducting an internal claims data analysis to identify any outliers in your coding patterns compared to specialty peers. If your billing distribution aligns with others in your field, it strongly suggests your coding is reasonable and justified. Comparing providers by geography and payer mix further validates appropriate coding.

Data pattern analysis will also show if any coding outliers relate to specific patients, individual physicians or coders, or other explainable factors. Your legal team can then incorporate these insights into defending your billing practices.

Seeking a Favorable Settlement

If billing errors or other non-compliant coding are identified during an audit or investigation, don’t assume you will automatically face harsh fraud penalties. In many cases, regulators are willing to reach reasonable settlements when providers demonstrate good faith cooperation.

An experienced attorney will advocate for the most favorable resolution possible and help convince authorities you have no intent to defraud payers. This can lead to agreeing on repayment of identified overpayments or enhanced internal controls rather than severe fines or program exclusion.

Settlement terms depend heavily on the nature of coding errors identified, the dollar amounts in question, whether internal controls were lacking, and your responsiveness to the audit process. Your attorney may negotiate a Corporate Integrity Agreement (CIA) allowing you to avoid program exclusion by strengthening compliance programs. Self-disclosure of errors before an audit starts also weighs favorably in settlement discussions.

How an Attorney Helps Your Defense

Facing healthcare fraud allegations can be frightening, leading providers to make costly legal missteps if acting alone. Engaging an attorney experienced with medical coding and billing disputes provides invaluable guidance for your defense while reducing risks at every phase of the audit and investigative process. This includes expertise in areas such as:

• Handling document/data requests
• Explaining complex coding and billing rules
• Conducting internal claim reviews
• Preparing detailed coding/billing analyses
• Communicating with investigators
• Negotiating reasonable settlements
• Avoiding program exclusions

Don’t leave your practice legally vulnerable by trying to manage billing fraud allegations on your own. An attorney who specializes in this field offers the best defense of your interests. At the first sign of an audit or investigation related to coding and billing, consult experienced counsel to protect your practice.