Physician Upcoding: When the E/M Level Outruns the Visit

Physician upcoding fraud means knowingly billing for a more expensive level of physician service than the care provided supports. A visit occurs, but the claim describes more complex work or more time than the physician delivered. Taxpayers fund the inflated bill, draining money from the programs that patients depend on. The template, added modifier and procedure code can each raise the price of the visit:

• Modifier 25 Fraud: The Visit Already Paid for in the Procedure
• EHR Automated Upcoding Fraud: When the EHR Creates the Claim
• Procedure Upcoding: Billing the Surgery That Was Not Performed
• Prolonged E/M Fraud: Practitioner Time That Cannot Be Reused
• G2211 Billing Scrutiny: Ongoing Care, Modifier 25 and the Service Date
• Unbundling Physician Procedures: Modifier 59, Global Surgery and False Separation

If you have seen a practice push higher evaluation and management levels while the actual care stayed the same, you may know how that gap reached Medicare or Medicaid. The useful story connects the instruction, the patient record and the bill.

How the E/M Level Is Chosen

Office evaluation and management levels depend on medical decision making or the reporting practitioner’s qualifying time on the service date. Under the office-visit rules that began January 1, 2021, the length of the history and examination no longer selects the level. A medically appropriate history and examination still belong in the visit, but adding more text to those parts of the note does not raise its level.

Medical decision making and time are alternative ways to select the office level. For example, the current practitioner-time thresholds are 30 minutes for 99214 and 40 minutes for 99215 when time selects the code. Qualifying medical decision making can support a level without meeting that time threshold. The CMS evaluation and management guide excludes time spent performing separately billed services.

Before the office change, levels generally depended on history, examination and medical decision making, with a narrower time exception for counseling and coordination of care. Hospital and home visits moved to revised selection rules in January 2023, so the setting and date travel with the code.

New-patient versus established-patient billing can also change what a visit claims to represent. A whistleblower complaint against City Practice Group of New York alleged that practices billed established patients as new when they changed insurance carriers, taking advantage of the new carrier’s lack of prior service records.

Where the Pressure Shows Up

Fee-for-service payment gives financial weight to the number of encounters, the services within each encounter and the mix of codes submitted. Physician compensation can combine salary, productivity pay and bonuses. A target on a billing dashboard can therefore reach both the practice’s revenue and the physician’s pay, as the IPC allegations below show.

The Robert Wood Johnson Foundation’s 2008 research synthesis, Physician Self-Referral and Physician-Owned Specialty Facilities, explains that fee-for-service payment rewards a high volume of services. For an upcoding inquiry, we follow the particular incentive further: what was counted, how it affected compensation, and what staff were told to change.

A whistleblower complaint concerning Comprehensive Pain Specialists alleged that providers copied templates into visit notes to inflate the apparent complexity or level of services. The whistleblower said those notes did not reflect the patient’s actual condition. If your concern involves a template, a default code or a later edit, we work through what the physician originally recorded and how the submitted claim changed.

What the Physician Upcoding Cases Show

The physician cases connect inflated levels to different kinds of evidence: compensation, audit warnings, care-facility records and the calendar. Each asks what the billed service represented in its own setting, with its own payment rules.

IPC and the Pressure to Catch Up

TeamHealth, as successor to IPC, agreed to pay $60 million in 2017 to resolve Medicare and Medicaid allegations involving hospitalist services coded above the care furnished. A former IPC hospitalist brought the whistleblower case. The government alleged that lower-billing physicians faced pressure to catch up with their peers.

The government’s complaint described a bonus tied to monthly billings after salary and benefits. Its own words show how higher billings could mean a larger bonus:

The complaint also alleged that IPC ranked hospitalists against one another and discussed their billing performance at regular meetings. Trainers and management allegedly pushed physicians using more moderate codes toward more complex codes that paid more per encounter. We see the problem in that alleged demand: the colleague’s billing becomes the target, while the patient’s care is supposed to determine the code.

The audit warnings sharpen the allegation. According to the complaint, Medicare contractor TrailBlazer sent education and audit letters to IPC hospitalists in Texas identifying departures from national billing patterns or upcoding established through claim audits. The government alleged that IPC encouraged its hospitalists to disregard that activity and continue billing the highest levels at the rates management expected. For an insider, the warning and the instruction that followed belong beside the claims submitted afterward.

Michigan Hospitalists and Impossible Days

A separate Michigan settlement announced in 2023 required IPC and Team Health to pay $4,384,618 to resolve allegations of inpatient upcoding, impossible days and services not rendered. The government alleged that hospitalists regularly billed codes for the most complex inpatient services and volumes of work they could not reasonably have performed in a day.

The allegation also crossed state lines. The same provider allegedly billed Medicare and Medicaid for services on the same day to beneficiaries in Michigan and Indiana, with the government contending that the Michigan services were not provided. That makes the provider’s schedule and location relevant alongside the claimed level of work.

Bluestone’s Care-Facility Claims

Bluestone agreed to pay $14,902,000 in 2024 to resolve allegations involving chronic-care patients in assisted living and other care facilities. The Justice Department alleged that Bluestone knowingly submitted claims that failed to meet Medicare, Medicaid and TRICARE requirements. The conduct at issue ran from 2015 through 2019.

The claims concerned the domiciliary rest home visit code for established patients, 99337, and the chronic care management code, 99490. The government alleged that the claims did not support the represented service level. A care-management claim and a visit claim describe different work, so we examine each against the care and documentation it required. Bluestone’s former Florida-market general manager brought the whistleblower case, showing that the person who understands the billing operation can matter alongside the person who provided care.

New Jersey Claims and the Calendar

Preventive & Diagnostic Medical Center and its physician agreed to pay $693,490 in 2024 to resolve allegations of upcoding, impossible days and services not provided. The Justice Department alleged that they used codes for more complex or longer services than those performed. The government’s example was March 2, 2018, when the time associated with billed codes exceeded 43 hours.

The government also alleged that the physician billed for services to New Jersey Medicaid beneficiaries on days when he was outside the United States. The calendar supplied another comparison with the claim.

What Evidence Does a Whistleblower Need?

A physician upcoding case needs evidence connecting the care provided, the level billed and who knew about the difference. Original clinical notes, submitted claims, practitioner identity, schedules and billing instructions answer different parts of that question. We work with insiders to connect those records to the government program that paid.

Claims analysis helps locate the pattern, and chart review tests what supports it. The inspector general for the Department of Health and Human Services used professional coders to review medical records in its 2014 evaluation and management study.

The Journal of AHIMA’s 2017 article, Busting Bad Medicine: a Call to Action Addressing Healthcare, Fraud, Waste, and Abuse, makes a useful point about the people behind the records. After discussing treatment dates, treatment descriptions and signatures, it says:

An insider can explain who set the target, who changed the code and what happened after a concern reached management. The IPC complaint shows why that account matters: the alleged pressure, warnings and continued billing connect decisions inside the company to the claims sent out. We bring the clinical work, the billing workflow and the people who understood both into the same examination.

Can Physician Upcoding Become a False Claims Act Case?

Yes, knowingly inflating physician claims paid by government health care programs can support a False Claims Act case. In the IPC complaint, the alleged instructions to ignore audit warnings connect management’s knowledge to the higher-level claims.

A whistleblower case under the False Claims Act can pay 15% to 30% of what the government recovers. The IPC and Bluestone cases show why both physicians and practice managers can bring valuable knowledge to that work.

When the Billing Target Reaches Your Desk

If you know who pushed the higher levels, changed the notes or dismissed the audit findings, speak to one of our Whistleblower Experts about how the higher levels got billed. We work beside you to build the case from the clinical care through the billing decisions, and bring in healthcare fraud whistleblower lawyers who know physician payment. You bring the inside view of the practice, and we bring the expertise and partnership to build your strongest physician upcoding whistleblower case.