{"id":10655,"date":"2020-03-13T19:50:29","date_gmt":"2020-03-13T14:20:29","guid":{"rendered":"https:\/\/www.medicalbillersandcoders.com\/blog\/?p=10655"},"modified":"2025-08-11T11:12:04","modified_gmt":"2025-08-11T11:12:04","slug":"under-coding-avoid-at-any-cost","status":"publish","type":"post","link":"https:\/\/www.medicalbillersandcoders.com\/blog\/under-coding-avoid-at-any-cost\/","title":{"rendered":"Under Coding: Avoid At Any Cost"},"content":{"rendered":"

You may be asking: \u201cWhat\u2019s the problem with under coding<\/a>? Aren\u2019t I saving Medicare program dollars by billing lower levels of service?\u201d CERT is a measure of improper payments. The goal of CMS is to pay claims that meet Medicare\u2019s requirements and pay them at the proper level of service.<\/p>\n

When there is an underpayment due to under coding, Medicare did not pay the claim correctly and it is counted as an improper payment error. You are reimbursed for the higher level of service. Under coding misrepresents the true level of care provided to Medicare beneficiaries.<\/p>\n

Under coding errors can statistically impact calculated error rates in the tens of millions of dollars. These statistics are used to calculate future Medicare payments and track trends in healthcare delivery. Patterns of under coding may be viewed as aberrant and open your practice up to audits and reviews.<\/p>\n

In addition, under coding impacts your practice revenue<\/a>. You are not being appropriately paid for the level of service you provide to your patients. Correcting under-coded claims can mean costly appeals.<\/p>\n

There are two types of under coding that can create liability for the provider:<\/strong><\/p>\n

    \n
  1. Failing to report services performed at the encounter<\/li>\n
  2. Under-reporting the level of service provided<\/li>\n<\/ol>\n

    Failing to report services performed at the encounter<\/h2>\n

    Assume a provider sees a patient and performs three services: A, B, and C. Assume also that the applicable bundling rule establishes that service C is a component of service B, and that service B is a component of service A. Assume no exclusionary modifiers are appropriate or justified.<\/p>\n

    If all three services were reported, only Service A would be paid. Knowing this, the provider omits the billing for Service B. The provider, therefore, reports Service A and Service C. Not knowing that Service B was provided, the payer allows payment for both services.<\/p>\n

    In this example, the omission was the misrepresentation that induced the payer to approve the additional (but not entitled) reimbursement. If the payer had been apprised of all the facts, they would have paid less money. This is the type of misrepresentation that can create false claims liability.<\/p>\n

    At a minimum, misrepresentation by omission certainly fits within the CMS definition of abuse, which is simply \u201cmisusing codes on a claim.\u201d<\/p>\n

    Under-reporting Level of Service<\/strong><\/h2>\n

    An established patient whose deductible is not met presents to the physician for an E\/M service. Assume that the work and associated documentation demonstrate the physician performed a level 4 service. Concerned about the cost to the patient, the provider reports a level 2 service, instead.<\/p>\n

    The value of the \u201cdiscount\u201d is remuneration to the patient. Since it can be shown that one purpose of the remuneration was to influence the patient\u2019s selection of the provider or decision to receive the healthcare service, the anti-kickback statute would be implicated.<\/p>\n

    These examples show that under coding isn\u2019t a recommended defensive strategy; it\u2019s a misrepresentation of services. Under coding establishes inaccurate utilization patterns, which may, at a minimum, flag a physician as an outlier and make him or her a target for an audit.<\/p>\n

    Tips to Prevent Undercoding<\/strong><\/h2>\n