Undercoding Is Not an Audit-Proof Strategy in Medical Documentation

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Overcoding is a common term used when discussing fraud and abuse in reporting procedures and services not supported by the actual work performed. Alternatively, undercoding—or failing to report the full extent of services or procedures provided—is an equally unsound practice and a compliance risk. In the world of quality reporting, undercoding can have damaging effects on a medical practice, because proper coding speaks directly to the illness or injury of a patient and the method of treatment. Medical coding is used to document or report the quality of patient care, provide accurate communication using the national classification system and report data that are used for a variety of research studies on topics, such as diseases, drugs, procedures or trends in healthcare.

Undercoding is not a good defensive strategy to avoid denials or audits, and it may result in the loss of revenue. This type of coding practice can actually create more problems, because there is no single remedy to prevent insurance companies from reviewing claims. Insurance companies do not deny claims because the codes billed reimburse higher than other codes. Payers are looking for codes to match the documentation on the patient’s record. The key to avoid denials is to ensure proper documentation; the patient’s medical record should be detailed and complete to reflect the work for each date of service. Documentation not only includes symptoms, diagnosis, care, treatment and medication, but also includes problems and risks to health, as well as safety information.

The goal of payers is to reimburse for claims that meet the requirements at the proper level of service. Patterns of undercoding may be viewed as irregular billing and can expose your practice to review for fraud. CMS defines fraud 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 another party. In other words, fraud includes obtaining something of value through misrepresentation or concealment of material facts. Deliberate undercoding is “making a false statement” as it relates to services provided and is ultimately a misrepresentation of the facts. Another important aspect is that undercoding has the potential to establish false utilization patterns, which may flag a physician as an outlier, making him or her a target for payer investigation and/or audits.

Patterns of undercoding may be viewed as irregular billing & can expose your practice to review for fraud. … Another important aspect is that undercoding has the potential to establish false utilization patterns.

Keep in mind that undercoding may make a provider an outlier just as easily as overcoding. Make sure your coding and billing staff are trained adequately and that your emergency medical record system helps capture services rendered, because this can help avoid undercoding without exposing yourself to heightened risk of audit.