Medical Coding Practice Test 2025 – 400 Free Practice Questions to Pass the Exam

Upcoding refers to the practice of coding a patient's diagnosis or treatment at a higher reimbursement level than is justified by the patient's actual condition or treatment. This can lead to significant financial repercussions for healthcare providers, particularly in the form of overpayment recoveries from audits.

When healthcare providers submit claims that are found to be inaccurately coded—whether due to upcoding or other practices—insurance companies and federal agencies may conduct audits to review the claims submitted. If an audit reveals instances of upcoding, the provider may be required to return the overpayments received based on those higher codes. This can lead to substantial financial losses as the provider not only loses the inflated reimbursements but also may face additional administrative costs associated with the audit process.

In contrast, while increased insurance premiums, loss of employment contracts, and fines from malpractice suits could also occur in the broader context of financial and legal actions against a provider, they are not direct and immediate finances resulting specifically from the act of upcoding itself. The immediate and direct consequence of upcoding is most clearly articulated through the potential for overpayment recoveries during audit investigations.