Upcoding and Unbundling Charges in Medical Billing Review

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upcoding and unbundling charges

Inflated medical billing, whether deliberate or the result of honest error, imposes a financial burden on consumers, insurers, and personal injury defendants. Those errors are often hidden in the complex codes that are used to identify procedures and services for which patients are billed.

A medical billing review can uncover excessive charges. Insurers that challenge a plaintiff’s request for damages, whistleblowers who need evidence to support a claim of fraudulent billing, and anyone who has been victimized by excessive medical bills can benefit from a medical billing review.

Medical Billing Coding

Medical billings are based on codes that are bewildering to patients. Most doctors have only a limited grasp of the coding systems. Doctors and hospitals rely on billing staff to get the codes right. 

Medical billings generally include codes that identify a patient’s diagnosis and each of the medical procedures that were performed. Separate sets of codes are used to describe the diagnosis and procedures. 

Diagnosis codes were standardized in the International Statistical Classification of Diseases and Related Health Problems (ICD). The tenth revision, ICD-10, will transition to ICD-11 in 2022. Diagnostic codes are used by medical billing departments to support their choice of procedural codes. 

The ICD-10 includes tens of thousands of codes that identify a patient’s health condition or injury, the location of the symptom or injury, whether the condition is new or an aggravation of a preexisting condition, and the severity and cause of the condition.

The two most common procedural coding systems in use today are the Current Procedural Terminology (CPT) codes and the Healthcare Common Procedure Coding System (HCPCS). While diagnostic codes explain the results of and reasons for a medical examination, procedural codes explain the treatment that was provided in response to the diagnosis.

The American Medical Association (AMA) maintains and annually revises CPT codes. Since doctors can perform thousands of different kinds of procedures, there are thousands of 5-digit CPT codes. The code for a checkup, for example, is 99214.

Extensive training and experience are required to select the correct CPT code. Similar procedures may require different codes, depending on the exact nature of the injury or condition that is being treated and the complexity of the procedure. For example, the CPT code for surgery to raise or “elevate” a depressed bone in a simple skull fracture is different from the code used to describe surgery that elevates a compound skull fracture.

The codes used by HCPCS were developed by the Centers for Medicare and Medicaid. Billings to Medicare and Medicaid must use the HCPCS. Some private insurers also require HCPCS billing codes.

Most codes (known as Level I codes) used by HCPCS are identical to CPT codes. The codes differ at Level II, which addresses products and medical equipment (such as ambulance rides and medications) for which patients are billed. Level II codes are much more specific in the HCPCS coding system than the CPT system requires.


Given the complexity of coding systems, it isn’t surprising that errors are frequently made when billing departments code medical bills. Many of those errors are inadvertent, but they can be costly to patients and insurers. Some coding errors reflect a deliberate attempt to overbill and thus to defraud patients, insurance companies, or Medicare/Medicaid.

Upcoding occurs when billers assign ICD codes for more severe conditions than the condition that the physician actually diagnosed and CPT codes for more complex and expensive procedures than those that were actually performed. Using the example discussed above, using the CPT code that applies to elevation of a compound skull fracture when the surgeon actually elevated a simple skull fracture would constitute upcoding.

Upcoding results in a higher payment than the doctor earned. A doctor who performs a simple checkup but charges for an extended examination will receive a larger fee. A doctor who upcodes consistently is probably defrauding insurers or the government. Even when the mistake is inadvertent, however, the entity that pays the bill — and the patient who pays a deductible or copay — is harmed.

A Medical billing review is designed to uncover upcoding. Insurance defense lawyers request billing reviews to challenge claims for reimbursement of medical expenses in personal injury actions. A plaintiff’s lawyer may request a billing review to support a whistleblower’s False Claims Act litigation. Any litigation that will be affected by upcoding merits a medical billing review.

Medical billing experts perform medical billing reviews by checking each CPT code against the service that was actually performed as documented in the patient’s medical records. When the CPT code is for a more expensive service than the service that was actually provided, the billing review uncovers evidence of overbilling and possibly of fraudulent billing.

Unbundling Charges

Comprehensive medical procedures should be billed using a CPT code that covers the entire procedure. The coding is intended to recognize that multiple procedures performed at the same time (during a single surgery, for example) take less time to perform than a physician would spend to perform the same procedures at separate times.

Billing a comprehensive code and a code for a procedure that is included in the comprehensive code results in double billing. For example, the code for a cardiovascular stress test assumes that the physician administered an ECG during the test. If the billing includes a code for a cardiovascular stress test and a separate billing for an ECG, the billing is excessive.

Health care providers inflate billings when they assign each procedure a separate CPT code rather than the comprehensive code that should be assigned to multiple procedures performed together. The practice of using multiple CPT codes rather than a single code is known as unbundling. Billings that unbundle procedures, either deliberately or mistakenly, result in higher charges.

A medical billing review searches for instances of unbundling in medical billings. By comparing medical records to medical billings, a medical billing expert can determine whether procedures were performed at the same time. A careful comparison can uncover unbundling errors that result in inflated billing.