What is “the effect of downcoding” in medical billing?

The Effect of Downcoding in Medical Billing

Downcoding refers to reducing the level of service or complexity on a medical claim, resulting in lower reimbursement.

The Effect of Downcoding in Medical Billing Explained

In medical billing, downcoding can occur when an insurance company adjusts a claim to reflect a less complex or less expensive service than what was billed. This leads to reduced payments for the provider. Downcoding may happen due to insufficient documentation or payer guidelines.

For example, a provider bills for a high-level office visit, but the payer downcodes it to a lower level based on the documentation, resulting in a lower reimbursement.

Find common acronyms and abbreviations in Medical billing glossary.

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