Question

Which of the following terms describes the act of unlawfully increasing the reimbursement amount of a third-party payer?

1) Upcoding
2) Bundling
3) Downcoding
4) Medical necessity

Answer 1

The term 'upcoding' describes the act of unlawfully increasing the reimbursement amount of a third-party payer by submitting codes for more expensive treatments than were actually provided.

Step-by-step explanation:

The act of unlawfully increasing the reimbursement amount of a third-party payer is known as upcoding. In a fee-for-service health financing system, providers are reimbursed based on the services they provide. Upcoding occurs when a provider submits codes for more expensive treatments or services than were actually provided to receive a higher payment, thereby defrauding the insurance system. This is illegal and can lead to significant penalties. In contrast to upcoding, downcoding is when insurers or other parties deliberately code for a lower-cost service than what was delivered, often to save costs. Bundling refers to grouping related services together to be billed under a single comprehensive code, and medical necessity indicates that a service is required for legitimate medical reasons.