Upcoding and Unbundling

Medicare and Medicaid are billed through a complex system of codes that are associated with the services rendered. Reimbursement rates are based on these codes. Some doctors and health care providers game the system by entering codes that do not accurately reflect the services provided. These practices are commonly referred to as “upcoding” and “unbundling.”


Upcoding is the practice of entering billing codes for more serious and expensive medical services than those actually provided, and is a common form of healthcare fraud. While upcoding can be isolated to single doctors in a practice, in some cases upcoding is systemic in an institution. For example, some healthcare providers have been caught rigging their electronic billing systems so that doctors can only select treatment codes with higher reimbursement rates for services associated with a less expensive code.


Unbundling, also known as “fragmentation,” is billing individual service codes for services that have an aggregate code. Medicare and Medicaid often require that certain services be bundled together. For example, services attendant to a surgery, such as anesthesia, incision, and closure, should normally be billed in the aggregate under one code for the surgical procedure. Some providers bill for the separate services individually, which in sum are significantly more expensive than the single aggregate code.

Upcoding and unbundling are common forms of healthcare fraud, and extremely difficult to detect. The government thus relies heavily on whistleblowers to expose this fraud. If you are witnessing what you believe to be upcoding or unbundling practices, you may have a whistleblower claim, and it is important to seek professional advice now.