Preventing Upcoding: Protect Your Practice from Costly Compliance Risks

medical biller

Medical billing fraud is a pervasive issue in the US. In 2023 alone, the government collected $2.68 billion in judgments and settlements from civil cases involving fraud and false claims. 

Upcoding is one of those false claim activities and presents a major compliance risk for your practice. It takes proactive solutions and a compliance-focused approach to help protect your business. 

The Growing Fear of Upcoding Fraud

Healthcare is an expensive industry, with spending reaching $4.8 trillion in the U.S. in 2023. Medicare spending accounts for nearly one third of those costs, at $1 trillion. These numbers are staggering and represent an enormous market that's difficult for the average person to understand.

Yet, most professionals understand that public and private insurers are generally prepared to pay for health expenses. For the healthcare industry, it may be tempting to take advantage of these tendencies, and it happens. 

Recent survey results show that an alarming 18% of medical billing professionals report their employer pressured them to engage in fraudulent practices for financial gain. Upcoding is one of these practices where clinicians submit codes for more expensive services than actually provided. 

Obviously, these are medical billing fraud concerns, legally and ethically, and can lead to audits, penalties, and reputational damage. Billing professionals also face significant risks, including committing unethical and illegal offenses under the boss’s orders. This can also lead to job loss if they fail to comply. It’s a worrisome problem.

Of medical coders, 90% report upcoding as a major ethical issue, and 99% say they foresee a major rise in upcoding whistleblower cases over the next 10 years. The fear of upcoding and medical billing compliance is clearly a widespread concern and may foreshadow an escalation in accountability. 

The Cost of Ignoring Compliance

The government prosecutes medical billing fraud, and the cost is steep. For some, persistent and planned fraud has led to a prison sentence and enormous restitution payments, to the tune of $336 million

However, the cost of apathy is also high. Ignoring compliance and its importance in medical billing error prevention or fraud prevention can lead to unexpected violations. 

Penalties

Under the False Claims Act, providers face monetary penalties equal to three times the damages to the government plus inflation, per claim. This penalty is for each false service or item, whether you unknowingly or intentionally upcode or alter it. 

A test may only be $500. But it becomes $1,500 plus inflation every time you submit it falsely, which may add up quickly.

Exclusion From Programs

Not only do you face expensive fees, but you also risk losing an income source. Public government insurance programs account for nearly one third of all insurance coverage in the U.S. Serious fraud offenses lead to exclusion from programs, which means you could lose access to a vital revenue stream.

Financial Inefficiency

In addition, ignoring compliant billing means missing out on an optimized revenue collection cycle. Insurers check for inconsistencies and supporting documents, and problems with codes or records lead to denials. These denials lead to claim audits and resubmissions, causing payment delays. 

Your billing team must then move away from productive tasks to correct mistakes, leading to even less efficiency, higher costs, and cash flow issues. Simply put, it pays to be proactive with compliance because the alternative is financial and legal chaos. 

A Step Ahead of Audits With PUREDI

So where do you start with compliance? The best place is with a medical billing solution like PUREDI that embeds compliance into the process to protect your bottom line. PUREDI’s features keep billing compliant and efficient, reduce claims denials, improve the revenue cycle, and lower the upcoding risk.

EHR Integration

Some coding mistakes happen from simple data entry mistakes. Integrating your billing software with your electronic health records syncs essential data for higher claim accuracy. 

Your billing team no longer needs to toggle between programs or input data. Instead, information and demographics flow from one software to the other and auto-populate in the correct fields. These integrations speed up claims generation and help reduce errors and denials. 

Error and Denial Engine

Claim scrubbing software reduces claims denials with meticulous pre-submission checks. Using automation, the workflow analyzes each critical point for inconsistencies, errors, missing documents, and more before the claim even leaves your office. 

These software features simplify and protect your submission process, leading to fewer claims denials. For instance, PUREDI software helps providers reduce claims with a 90% success rate. 

Analytics

Crunching your data helps you find inconsistencies in your medical billing practices. However, software simplifies and speeds up internal auditing, automatically tracking your claims and billing data to identify common issues. This can include the overuse of certain codes, identifying duplicate billing, or finding discrepancies between diagnoses and codes in order to increase medical billing error prevention. 

Financial Benefits of Compliance

While many fear the consequences of noncompliance, focusing on the benefits of regulatory management improves your practice and drives financial growth. Businesses that prioritize compliance experience fewer expensive errors, greater regulatory protection, and better revenue and business stability. 

Prevents Costly Errors

A proactive process leads to fewer medical billing errors, keeping more revenue and profit in your pocket. You avoid the cost of audits, penalties, lost time and wages, lawsuits, and legal fees.

Regulatory Protection 

At the same time, compliance provides peace of mind. When your ducks are metaphorically in a row, you can adapt to regulatory changes without chaos and panic. Your business stays ahead without requiring any significant overhauls, creating more agility. 

Enhances Business Stability

With greater agility, fewer error costs and denials, compliance and billing software improve your revenue cycle. You experience fewer payment delays and costly risks, creating greater financial and organizational security. 

In addition, compliance boosts your overall revenue. Providers who use PUREDI see a 3%-5% increase in revenue from avoidable claim denials, a jump in revenue that can stabilize your cash flow and offer relief.

Protect Your Business With PUREDI Medical Billing Solutions 

The right tools simplify your compliance process, making it easier to find and correct errors. PUREDI solutions offer intelligent features that protect against risks while driving revenue growth and optimization. Schedule a demo to discover the potential for your practice. 

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