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The beneficiary's cost-share is established by law. It protects both the beneficiary and the government. When a beneficiary is responsible for paying part of the cost of the care, we have found there is more attention paid to the accuracy of the Explanation of Benefits. If the charge is inaccurate, the beneficiary is likely to report the discrepancy. Many fraud cases are initiated as a result of such reportings. The cost-share also helps protect the beneficiary. When a beneficiary is responsible for paying 20-25 percent of a $10,000 procedure, he/she is likely to get a second medical opinion to ensure the services are medically necessary and appropriate. Providers cannot waive cost-shares. It is an obligation imposed by Congress for valid reasons. Waiver of the cost-share under the new fraud amendments is treated as a fraudulent act with separate dollar penalties.

This is billing for two procedures that are either physically impossible to perform at the same time (such as an abdominal hysterectomy and a vaginal hysterectomy) or are really duplicative. In laboratory billings, a mutually-exclusive billing might be laboratory tests that are billed at the same time when it is necessary to wait for the results of the first before the second test is requested. In U.S. vs. Pickett, an ultrasound for a complete fetal and maternal evaluation was billed in addition to a fetal biophysical profile, basically the same procedure.

Upcoding is the practice of billing the services at a higher level than what was actually provided to obtain reimbursement at a higher rate.

Upcoding is considered fraudulent in that it is a misrepresentation of the services provided.

One example is billing for a 30 minute session of individual psychotherapy (90843) as if 45-50 minutes were provided (90844). Another is providing group psychotherapy but billing for it as if it were individual psychotherapy. Since a group psychotherapy session generally involves 4-10 patients, and individual psychotherapy reimburses at the rate of approximately $100 per hour, misrepresenting the services could give the provider a financial windfall of $400-$1000 per hour. Other types of upcoding exist, such as providing a unilateral mammography but billing for it as if it were a bilateral mammography.

Upcoding can exist in the selection of the Evaluation and Management codes (99000 series) which are used for office and hospital visits. In 1992, the Physicians Current Procedural Terminology (CPT) was revised to include specific time elements for each level of visit, specific clinical examples and a definition of what the patient's condition should be if a higher level code is selected. There are 5 levels of office visits, for both new patients and established patients. The level of office visit is determined by the number of diagnoses, the complexity of the case, the risk of complications or morbidity and the complexity of the decision making—straight-forward, low, moderate or high.

Yes. It provides for a $10,000 fine per incidence of upcoding, and with the clarification in the CPT as of 1992, clear-cut parameters exist as to what level is the appropriate one to bill.

"Unbundling," "fragmenting" or "code gaming" in order to manipulate the CPT codes as a means of increasing reimbursement is considered a misrepresentation of the services rendered. Such a practice is considered fraudulent and abusive. In U.S. vs Pickett, a radiologist was convicted in a criminal trial for billing for a consultation in addition to the diagnostic imaging procedure which included performing the test and its interpretation. This is a form of unbundling or double billing.