Under Coding Is No Better than Overcoding
Question: I’m in need of written documentation to verify that “under coding” is a compliance risk, much like overcoding. Where can I find this?
Answer: The Centers for Medicare & Medicaid Services (CMS), through its Medicare Learning Network, offers a Fact Sheet detailing “Medicare Fraud and Abuse: Prevention, Detection, and Reporting.” Nothing in the document specifically talks about “down coding” or “under coding,” but if you read between the lines, you’ll recognize under coding as a compliance risk.
For example, consider the CMS definition of fraud:
In general, fraud is defined as making false statements or representations of material facts to obtain some benefit or payment for which no entitlement would otherwise exist. These acts may be committed either for the person’s own benefit or for the benefit of some other party. In other words, fraud includes the obtaining of something of value through misrepresentation or concealment of material facts.
Deliberate under coding is, in reality, “making a false statement” about the services provided, and is ultimately a “misrepresentation” of the facts. The fact sheet gives an example of fraud as “knowingly billing for services that were not furnished,” which would apply if services are purposefully under coded.
Under coding also fits within the definition of “abuse,” as defined by CMS as “misusing codes on a claim.”
Under the False Claims Act, a physician may be held liable for “submit[ing] claims to Medicare for medical services he or she knows were not provided.” Within this context, you could argue that under coding represents “deliberate ignorance or reckless disregard of the truth related to the claim.”
There’s also the Criminal Health Care Fraud statute, which makes it a crime “to obtain (by means of false or fraudulent pretenses, representations, or promises) any of the money or property owned by, or under the custody or control of, any health care benefit program.” Again, under coding services may be perceived as “false or fraudulent representations” of the services provided.
Consider also the Anti-kickback statute: Coding services at lower than actual levels might be interpreted as an inducement to patients (who could benefit by having a lower co-pay, etc.). That would be another violation of federal law.
In other words, there are a variety of ways that under coding might potentially be considered a violation of fraud and abuse rules. Under coding isn’t playing it safe, it’s a misrepresentation of services. Coding should be based on documentation (and underlying medical necessity). Anything less is potentially problematic.
Another important aspect to keep in mind is that under coding establishes false utilization patterns, which in turn may flag a physician as an outlier, making him or her a target for payer investigation and/or audits.
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