Blog » We Didn’t Do It!

We Didn’t Do It!

Created Sep 05 2016, 08:00 PM by Lippincott Solutions
  • upcoding
  • HAI
  • hospital-acquired infections
  • Medicare

Tuesday, September 6, 2016

You would think hospitals with the lowest numbers of hospital-acquired conditions would be healthcare organizations with stellar practices and the highest integrity. A recent study out of the Stanford Graduate School of Business, however, suggests just the opposite.

When it comes to reporting hospital-acquired infections, many hospitals aren’t telling the truth, according to researcher and associate professor Mohsen Bayati, PhD. Instead, they’re simply “upcoding” their records — and claiming patients are showing up in their settings already infected.

“We conservatively estimate that over 10,000 out of nearly 60,000 annual reimbursed claims for present-on-admission infections (18.5%) were upcoded hospital-acquired infections, resulting in an added cost burden of $200 million to Medicare,” reported Dr. Bayati and colleagues.

Their paper, “Evidence of Strategic Behavior in Medicare Claims Reporting,” is available here.


Upcoding is a term that describes the use of inaccurate billing codes used by providers to avoid penalties and score higher reimbursement. Without an audit, upcoding is difficult to pinpoint. In this study, researchers attempted to shed light on use of this “strategic behavior” by comparing the numbers of hospital-acquired infections (HAIs) reported in states with strict reporting requirements with those reported states collected less information on HAIs.

Their finding? In states with weak reporting requirements, hospitals reported significantly fewer HAIs and higher rates of infections supposedly present on admission. The difference in the number of HAIs between those hospitals and hospitals in states with tighter reporting requirements, researchers found, could not be explained by patient demographics, risk factors or anything else.

“The differential impact of state-level regulation on HAI and present-on-admission (POA) reporting rates,” they concluded, “strongly suggests that weakly-regulated providers upcode.”


Upcoding is not a harmless way to cover mistakes and generate reimbursement for infections that Medicare will no longer reimburse for. Beyond the undeserved Medicare reimbursement these organizations collect, the impact of upcoding negatively affects other areas, too.

As the researchers outline in their discussion,

  • Upcoding unfairly penalizes honest providers and financially incentivizes them to upcode, too.
  • Upcoding makes medical records inaccurate.
  • Upcoding interferes with the tracking of harmful infections as well as the evaluation of practices and policies geared to deter them.
  • Upcoding is essentially lying to patients and publicizing a better quality of care than your hospital truly provides.

“Thus, we recommend that the Centers for Medicare & Medicaid Services (CMS) implement measures to enforce truthful reporting by providers,” researchers wrote. 


Pointing out that upcoding completely skirts Medicare reimbursement penalties put in place to cut HAIs and other hospital-acquired conditions, the researchers recommend a different policy route: conduct more targeted audits of hospitals with high POA-to -HAI reporting ratios.

“Providers with higher risk-adjusted POA reporting rates and lower risk-adjusted HAI reporting rates are more likely to be engaging in HAI upcoding,” they pointed out.

Second, they recommend strengthening mandatory HAI reporting requirements to include reporting of patient-identifying information such as a medical record number or billing number, a detailed description of the adverse event, and the identified root cause.

“Reporting more detailed information increases the threat of setting off red flags when upcoding, and thus possibly diminishes the rate of upcoding,” the researchers wrote. “CMS may benefit by implementing such detailed information reporting requirements in addition to existing financial incentives to help improve hospital infrastructure and truthful reporting nationally.”

Are your surprised to find hospitals strategically upcode to avoid penalties for HAIs? Share your thoughts! 

To help your facility reduce these costly errors and remain compliant, Lippincott Solutions has collaborated with Joint Commission Resources on a series of co-developed institutional CE courses on Patient Safety, Compliance, Heart Failure, and Stroke.  For more information, click HERE