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Journal Article
Upcoding
2020
Overview
In most US health insurance markets, plans face strong incentives to upcode the patient diagnoses they report to the regulator, as these affect the risk-adjusted payments that plans receive. We show that enrollees in private Medicare plans generate 6%–16% higher diagnosisbased risk scores than they would under fee-for-service Medicare, where diagnoses do not affect most provider payments. Our estimates imply that upcoding generates billions in excess public spending and significant distortions to firm and consumer behavior. We show that coding intensity increases with vertical integration, suggesting a principal-agent problem faced by insurers, who desire more intense coding from the providers with whom they contract.
Publisher
University of Chicago Press,The University of Chicago Press,University of Chicago, acting through its Press
