UCHealth, Colorado’s largest medical provider, has agreed to pay $23 million to settle allegations of overbilling Medicare and TRICARE for emergency care services. The accusations, which the health system denies, stem from claims that UCHealth improperly used the highest billing code for emergency department visits between November 2017 and March 2021. Federal prosecutors allege the practice violated the False Claims Act by not accurately reflecting the severity of patients’ conditions or the resources used to treat them.
At the center of the controversy are Current Procedural Terminology (CPT) codes used to bill evaluation and management (E&M) services in emergency departments. Federal authorities claim UCHealth automatically applied the highest-level code, CPT 99285, for certain cases where patients had their vital signs checked more often than their time in the ER justified. This practice, known as “upcoding,” has raised broader concerns about its role in escalating healthcare costs. While UCHealth denies the allegations, it opted for a settlement to avoid prolonged litigation and focus on patient care, according to spokesperson Dan Weaver.
The Growing Impact of “Upcoding”
The practice of upcoding, or assigning higher billing codes than appropriate, is a significant driver of rising healthcare costs in the U.S. Studies show that the use of CPT 99285 has surged over the past decade, becoming the most commonly billed E&M code in Colorado. This shift translates to substantial cost differences: Medicare reimburses $621.39 for a level-5 emergency visit compared to $85.89 for a level-1 visit. Private insurers pay even more, with rates exceeding $6,000 for the most severe cases. Critics argue that upcoding not only burdens government programs but also inflates healthcare expenses for patients and insurers.
The UCHealth allegations came to light through a whistleblower complaint by Timothy Sanders, a former revenue recovery auditor for the system. Sanders claimed he discovered the automated upcoding system and that UCHealth failed to address the issue unless patients contested their bills. As a whistleblower, Sanders is entitled to a portion of the settlement and will receive $3.91 million.
Maintaining Compliance in a Complex Billing Landscape
UCHealth’s case highlights the complexities of hospital billing and the potential for errors or mismanagement. With more than a dozen hospitals and millions of patients treated annually, ensuring accurate billing is a challenging but critical responsibility for health systems. This settlement serves as a reminder of the importance of adhering to ethical and transparent billing practices to maintain trust and compliance.
Partnering with Welter Healthcare Partners for Solutions
To help healthcare organizations navigate coding and billing challenges, Welter Healthcare Partners recommends a proactive approach:
- Conduct an Internal Audit: Regularly review E&M code submissions to identify discrepancies and correct errors.
- Provide Education and Training: Strengthen coding team expertise through targeted training that reinforces documentation requirements for each E&M level.
- Collaborate on Adjustments: Work with Welter Healthcare Partners to correct claims and apply for reprocessing to ensure compliance with payer requirements.
Welter Healthcare Partners specializes in supporting healthcare organizations with accurate coding and billing practices and compliance. Contact us to learn how we can help your team implement these corrections and maintain the integrity of your revenue cycle.
More information regarding UCHealth’s overbilling allegations can be found here.