Medical Auditing Practice Exam

Overcoding occurs when a healthcare provider reports a code for a procedure or service that represents a higher degree of severity or complexity than what was actually provided. This practice can lead to significant legal issues and financial penalties for several reasons.

First, overcoding is considered fraudulent behavior because it misrepresents the services rendered to inflate billing, which violates health insurance guidelines and regulations. When auditors or regulatory bodies identify such practices during reviews, the healthcare provider may face investigations, resulting in fines or other sanctions.

Moreover, allegations of fraudulent billing can damage the reputation of the healthcare provider, leading to loss of trust among patients and partners in the healthcare community, in addition to potential criminal charges depending on the severity of the overcoding.

In contrast, higher patient satisfaction rates, decreased revenue, and more accurate billing practices are not outcomes of overcoding. In fact, overcoding generally leads to complications that undermine trust and create financial and legal risks.