Upcoding on the rise across all outpatient settings, study finds
A new study into medical billing practices found that upcoding is becoming increasingly common across outpatient settings, including primary care, urgent care, and emergency rooms. All were found to be using higher-complexity billing codes more frequently, resulting in increased reimbursement rates—even in situations where such coding was unwarranted, such as when a patient reported nausea, a cough or a common rash.
The report, compiled based on publicly available billing data by market research firm Trilliant Health, found that between 2018 and 2023, patient visits were upcoded with growing frequency across all outpatient settings. The number of recorded procedure codes ranked at level four or five—which represent patient encounters requiring more complex decision-making—grew from 32.5% to 39.6% during that period.
When the data was broken down by setting, high-complexity codes in emergency rooms increased from 32.5% to 39.6%. In urgent care, the use of these codes spiked from 34.0% to 40.6%, and in physician offices, encounters ranked at a four or five jumped from 38.5% to 45.0%.
Conversely, the number of patient encounters coded at levels one and two—reserved for common ailments and simpler visits—dropped proportionately. While this could suggest that patients are presenting with more complex conditions, the researchers at Trilliant expressed skepticism about that conclusion.
“The way in which this trend impacts nearly every diagnosis category suggests that it is not isolated to specific clinical areas but instead reflects a broader evolution in healthcare delivery and administration. Some of this increase may reflect real changes in patient acuity, driven in part by aging populations, higher rates of chronic illness, and more complex presentations,” the authors wrote. “However, the data also suggest that comparable conditions are being billed at increasingly higher levels over time."
As evidence, the team noted that common diagnoses “saw some of the largest increases in emergency department high-acuity coding, raising questions about whether billing complexity is outpacing clinical severity.” These include the aforementioned cough, nausea and rash—symptoms typically managed without complex clinical decision-making.
Zooming in on specific billing codes, the most notable increases in upcoding stemmed from diseases of the eyes, ears and skin—with “nonspecific skin eruptions” receiving level 4 or 5 codes at an increased rate of 19.7 percentage points between 2018 and 2023.
Patients pay the price
This shift in coding not only increases the cost of care delivery, but also makes cost-management efforts more difficult, since the uptick in complexity coding isn’t linked to a specific condition, such as a rise in cancerous skin lesions. Instead, codes being used more often tend to be those associated with nonspecific, common symptoms.
“For payers, this trend presents growing challenges in managing total cost of care,” researchers at Trilliant wrote. “High-acuity codes command higher payments and contribute significantly to healthcare spending growth. In response, many insurers are implementing stricter claims review processes, deploying algorithms to identify questionable bills and introducing more prior authorization requirements.”
The result, the authors conclude, will be increased risk being put on patients in the form of higher insurance premiums.
“The financial consequences extend to patients, who increasingly bear more of the cost burden through deductibles and coinsurance. In the absence of clear explanations for why similar visits now generate higher charges, this can erode trust and reinforce the opacity of healthcare pricing,” they added.
The full report can be found here.
Chad is an award-winning writer and editor with over 15 years of experience working in media. He has a decade-long professional background in healthcare, working as a writer and in public relations.