Comprehensive and Detailed Explanation

Definition of Upcoding (ACFE Manual Reference)

The ACFE Manual identifies upcoding as a type of health care billing fraud in which the provider submits a claim for a more expensive or more complex service than what was actually provided.

Although the exact term “upcoding” appears within the health care fraud discussions, the broader category is part of Financial Transactions and Fraud Schemes concerning fraudulent billing practices. The manual describes fraud schemes in which the perpetrator:

Bills for services not provided,

Bills for more expensive services than were actually delivered, or

Uses codes that misrepresent the level or nature of medical procedures.

Upcoding specifically involves:

Billing for a higher-cost procedure than what was actually performed, by using a code representing a more expensive service.

Why Option D Is Correct

Dr. Raul advised a patient with a small fracture to use crutches, but he submitted a claim using a code indicating that he placed a cast on the patient.

Actual service: Advice and crutches

Billed service: Application of a cast (more expensive procedure)

This is a textbook example of upcoding, as the provider is using a higher-cost CPT code to obtain greater reimbursement than the service warrants.

Why the Other Options Are Incorrect

Option A – Not Upcoding

Cindy receives a payment to undergo an unnecessary procedure, which is then billed fraudulently.

This is medically unnecessary services fraud, not upcoding.

Option B – Not Upcoding

Dr. Loomis uses three procedure codes instead of one.

This is an example of unbundling, which involves billing separate codes for procedures that should be billed as a single package.

Option C – Not Upcoding

Landon inflates the amount of a medical bill he wants reimbursed.

This is billing inflation or overstatement, but not misrepresentation via coding.

ACFE Manual Supporting Reference

The Manual’s section on fraudulent billing schemes discusses cases where perpetrators misrepresent medical procedures, including using false or inflated codes to obtain higher reimbursements.