Orthopedic Coding Alert

Question: I keep hearing that undercoding is just as dangerous as upcoding, but no one can ever explain why that is. Can you please advise?

Texas Subscriber

Answer: Incorrectly coding is problematic for many reasons, most of all because you should be able to get paid for all of the services you provide. But in the case of Medicare, undercoding may be seen as inducement, which may then be considered fraud or abuse or both. Medicare considers inducement as "offering any free service to a patient to encourage providing a service that would be covered by Medicare."

Specifically, inducement occurs when a provider knows that remuneration offered to Medicare or Medicaid beneficiaries will likely influence the beneficiary to order or receive items or services from the provider. The "should know" standard is met if a provider acts with deliberate ignorance or reckless disregard. Medicare does not require proof of specific intent.

The HHS Office of Inspector General considers providing free or discounted goods or services to existing customers who have an ongoing relationship with a provider likely to influence future purchases of covered services by those customers.