• AHAP Inc.

Breaking the DownCoding Habit

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.

Downcoding: a red flag

Typically, downcoding occurs because the provider fails to provide relevant documentation details to assign a service, procedure, or diagnosis to the optimal level of specificity.


Why do providers undercode?

Some providers try to be conservative with their coding to avoid scrutiny by insurers and auditors. They may think that downcoding or using the same level code for all visits is playing it safe. Providers may downcode as a defensive strategy to avoid denied claims, audits, etc. Some providers may purposely undercode in the mistaken belief that downcoding or using the same level code for all visits is playing it safe.


Other providers, particularly those working in larger institutions, may be using an electronic medical record (EMR) system. While this technology can be a huge time-saver, these systems often suggest CPT codes without considering factors that would warrant using a higher code.


Fixing the problem What can you do to make sure you are coding correctly?

1. Analyze your coding patterns. A good place to start is to make sure that your billing company gives you a CPT productivity listing each month that shows how many of each CPT code is being billed. Providers should report and document diagnoses, services, and procedures to the optimal level demonstrated by provider documentation and medical necessity. Anything less is noncompliant. Insurers want you to bill the appropriate level of care, and any one code that is used exclusively will raise a red flag. Some insurers give physicians quarterly or yearly reports showing how their coding patterns compare with their peers and norms. If your statistics differ significantly, you need to figure out why. 2. Do not blindly trust codes suggested by a computer. Be wary of EMR systems that promise to take care of all the coding for you, because many of your patients cannot be neatly categorized by a computer program. If the system uses a template, for example, review it for completeness and accuracy. And make sure the system includes the contents of any free form notes that you provide when it is choosing a code. The software’s ICD-10 listings need to be updated each year, and all conditions that apply to the visit should be noted. If you cannot review the codes your system is choosing each time, at least review a sampling every month. Be sure the system properly documents any consults, makes note of referring physicians and generates a report. 3. Invest in a coding audit. Periodic, audits of your coding, billing, and documentation practices is one of the best ways to detect and eliminate upcoding and downcoding as well as many other compliance risks. For example, an audit of 10 to 20 records per provider, every quarter or semi-annual, can pinpoint inconsistencies between provider documentation and the codes reported. The goal of these audits is to ensure that documentation guidelines are met, and that services, procedures, and diagnoses are supported at the level they are billed.


Also, any audit should include subsequent education for all physicians in the practice. Discuss audit findings and let physicians know about any coding irregularities. This corrective action will more than pay for itself with better documentation, fewer demands from insurers for refunds and maximized collections.

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