Upcoding Fraud

Upcoding fraud primarily occurs in two contexts.

First, upcoding is a common form of risk adjustment fraud committed under Medicare Part C. In these cases, a private insurance company exaggerates the severity of their members’ illnesses in order to draw additional risk adjustment payments from Medicare.

Healthcare providers—particularly those who share in the risk adjustment payments—sometimes participate in the scheme by inflating their patients’ diagnostic data before submitting the data to the insurer.

Second, upcoding is also prevalent under traditional Medicare. In this context, a provider sends a bill to Medicare for a more expensive service than the one actually performed. For example, the provider might:

  • exaggerate the time the procedure took to perform
  • misstate the equipment involved in the procedure
  • lie about the staff involved in performing the procedure
  • bill for individual therapy when group therapy was actually provided
  • simply make up that a procedure happened
  • perform (and bill for) procedures that patients simply do not need in violation of “medical necessity” rules

Examples of upcoding:

  • Dennis B. Jaffe D.M.DAn Atlanta-based dentist settled charges he was fraudulently billing for services performed by his assistant while Dr. Jaffe was not in the office. Dr. Jaffe also fraudulently sought payment from Medicaid for higher and more expensive levels of service than were actually performed. The case was brought by a whistleblower.
  • Deremedx DermatologyA Long Island dermatologist settled allegations he billed “impossible days,” or over 24 hours of billing in a single calendar day.
  • Deaconess Home HealthA Milwaukee-area home health company settled allegations it sent in-home nurses to the homes of patients who did not require in-home care.

To find out more about whether a particular type of fraud is actionable under the False Claims Act, contact us today.