Credit: Greentech
Workers have started suing employers over whether employers shopped carefully enough for voluntary benefits and pharmacy benefit manager fees.
For employers and benefits advisors, this raises a question: Will workers file similar suits over whether employers and their plan administrators have paid enough attention to physician and hospital claim upcoding?
Coding: The U.S. health care system uses one set of codes, the ICD-10-CM codes, to identify what health problems people have and another, the CPT codes, to describe the services that health care providers deliver.
The federal agencies in charge of health programs like the Affordable Care Act commercial health insurance risk-adjustment program and the Medicare Advantage plan program use their own coding systems to classify plan participants' level of health risk, to administer programs that provide extra cash when plans cover high-risk patients.
Providers may use "upcoding, or efforts to make patients look sicker than they are, when they want to get higher payments from health insurers, self-funded employer health plans or other "payers."
The payers may use tough "claim editing" or downcoding strategies to adjust what they believe to be padded health care provider bills, and critics contend that they may try to use their own form of upcoding to make their plan participants look sicker than they are, to increase the amount of revenue coming from government subsidy and risk-adjustment programs.
Coding news: Health condition coding made national headlines earlier this month. Aetna, a unit of CVS Health, agreed to pay the federal government $117.7 million to resolve allegations that Aetna had increased its federal Medicare Advantage plan revenue by upcoding plan participants' health risk scores.
Pleadings for a court case involving UnitedHealth's UnitedHealthcare subsidiary and TeamHealth, an emergency room physician staffing firm, include allegations that UnitedHealth affiliates may engage both in downcoding and in upcoding.
UnitedHealthcare is suing TeamHealth over allegations that its physicians use a procedure code for patients who are at imminent risk of death far too often.
Another UnitedHealth subsidiary, Optum Health, has a minority stake in Sound Physicians, another emergency room physician staffing firm.
TeamHealth has been trying, unsuccessfully, to get Sound Physicians' billing records, to support TeamHealth's contention that Sound Physicians likely codes its claims roughly the same way TeamHealth does.
A Blue Cross Blue Shield think tank reported last week that it analyzed specific types of hospital claims and found what it believes is convincing evidence that some hospitals used AI to upcode claims in a way that increased commercial plan costs by about 1.8% between 2023 and 204.
For now, Medicare managers and health plans seem to be thinking mainly about what they can do to stop provider upcoding.
The ERISA Industry Committee, for example, has suggested that a Medicare billing transparency provision in the new Consolidated Appropriations Act of 2026 will help plans push back on provider upcoding.
But the same lawyers who sued over what they allege to be employers' duty under the Employee Retirement Income Security Act to shop carefully for voluntary benefits and PBM services could apply the same logic to employers' efforts to emulate Medicare managers' fight against vendor upcoding.
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