UCHealth: The Billing Rule That Survived the Complaints

The $23 million UCHealth upcoding settlement resolved allegations that an automatic rule inflated emergency department facility bills. The government alleged that coding employees warned about the rule and patients complained about their bills, but UCHealth responded to individual complaints while leaving the rule in place. For someone who works inside hospital billing, that last decision is the heart of this case.

The Rule Behind CPT 99285

UCHealth allegedly used the number of vital-sign checks to select the highest emergency department facility code. University of Colorado Health, known as UCHealth, is a healthcare system headquartered in Aurora, Colorado. The Justice Department’s announcement describes claims sent to Medicare and TRICARE from November 1, 2017, through March 31, 2021.

For an emergency department facility claim, hospitals use one of five codes, CPT 99281 through CPT 99285, according to the resources associated with the visit. The last code represents the highest hospital resource use. The alleged UCHealth rule selected it when the number of times staff checked a patient’s set of vital signs exceeded the patient’s total hours in the emergency department. Visits lasting fewer than 60 minutes were excluded. The agreement says UCHealth sometimes called this rule “frequent monitoring of vital signs.”

The whistleblower’s complaint gives an example of how little that comparison could say about the treatment:

The government alleged that Medicare and TRICARE paid claims produced by this rule. Taxpayers were paying for hospital resources the government said those visits did not justify.

The Facility Level and the Physician’s Fee

The UCHealth allegations concerned the hospital’s outpatient facility billing for emergency visits. That bill covers the hospital resources used during the encounter. The physician’s professional fee pays for the clinician’s services separately.

For someone comparing facility-level and professional ED upcoding, the distinction changes what the billed level must explain: the hospital resources used during the visit, separately from the clinician’s work.

The settlement agreement accompanying the Justice Department’s announcement explains the required connection: a hospital’s coding guidelines should reasonably relate resource intensity to the level selected. The government alleged that UCHealth’s ED coding algorithm broke that connection. A code meant to describe the hospital’s resources instead followed a comparison between a count and a clock.

The Complaints Reached Management

The whistleblower alleged that the disputed rule had reached UCHealth’s chief financial officer and that the response was to keep it. The complaint puts it plainly:

The government’s account in the agreement adds the wider pattern. UCHealth allegedly received numerous warnings from coding employees about the automatic rule. It also received and answered patient complaints without changing the rule across the system. According to the government, reports from the Centers for Medicare & Medicaid Services consistently flagged UCHealth as a high outlier for its use of the top code during the covered period.

The complaint also describes what patients were saying: brief visits and minor problems had produced bills they thought excessive. A disputed patient bill brought an individual encounter back for review. The employee warnings concerned the rule that could produce the next one.

The government alleged that UCHealth knew its method failed to reflect facility resources and continued submitting claims based on it. That makes management’s response to coding warnings central to the story.

The Code, the Encounter and the Policy Version

An audit showing that the system followed its own rule does not answer the question a hospital false claims case turns on: whether the level billed matched the care delivered.

An insider who knows a coding policy’s version history and who decided to keep it can explain what a claims spreadsheet cannot. Our whistleblower experts connect that knowledge to the health care billing it produced.

RAND Corporation’s 2024 report, Methodologies to Measure Upcoding in Provider Settings, shows why the encounter records matter: of the studies it reviewed, only three tested coding intensity against a gold standard, and the others gauged upcoding indirectly.

The report explains how matching claims with medical records can test billed severity against documented diagnoses, procedures and screenings. An insider who knows both the visits and the rule can help explain why the high codes kept appearing.

A Rule Can Reach Beyond the Billing Screen

The allegations against Health Management Associates show another way hospital software can shape the account of an emergency visit. A whistleblower’s complaint alleged that entering a normal heart rate in ProMed could cause the system to document other normal physical findings that nobody had evaluated. That allegation concerned the contents of the medical record. The UCHealth allegations concerned the selection of the facility billing level. Both put the system’s instructions between the care delivered and the account used to support payment.

For an insider, that is a concrete reason to know what the software adds, selects or carries forward. The person maintaining the rule may understand a repeated billing pattern that looks very different to someone reviewing claims alone.

The Settlement and the Oversight UCHealth Refused

The agreement designated $11.5 million of the settlement as restitution. UCHealth also agreed not to seek payment for the covered billings from patients, their parents or sponsors, or third-party payers.

UCHealth agreed to settle the billing allegations but refused compliance oversight through a corporate integrity agreement with the Department of Health and Human Services Office of Inspector General. The agency’s UCHealth oversight notice lists heightened scrutiny following that refusal on November 12, 2024.

Did a Whistleblower Bring the UCHealth Upcoding Case?

Yes. A whistleblower brought a qui tam case under the False Claims Act over UCHealth’s emergency department software rule. The Justice Department announced the resolution on November 12, 2024, and a $3.91 million share of the settlement proceeds for the whistleblower.

A whistleblower case under the False Claims Act can pay 15% to 30% of what the government recovers. For a coder, auditor or revenue-cycle employee, the useful knowledge may be how the hospital selected the code and what happened when someone challenged it.

The Decisions Behind an Automatic Code

If you coded, audited or maintained a hospital’s emergency department charges, you may know why a rule kept assigning levels the visits could not support. Talk to our whistleblower experts about the decisions behind that rule. We build your strongest hospital billing whistleblower case around that knowledge, bring in whistleblower lawyers who know hospital reimbursement, and stay beside you through the case’s resolution.