Downcoding and the Negative Impact on Practice Revenue

By Ramesh Leelasankar and Soundar Raja, Delivery Managers

As a provider, you may have struggled to evaluate the benefits of downcoding. Believe it or not, CMS data reveals that some physicians are coding four levels below to avoid payor audits. Comprehensive Error Rate Testing (CERT) reports that physicians lose more than $1 billion in revenue every year due to this practice.

So, is downcoding worth the risk?

Absolutely not! Downcoding severely hurts our clients and decreases their revenue. We want to help you avoid the falsehoods surrounding this common practice.

When a provider downcodes, it affects more than just revenue. It has the same, and sometimes even a bigger, level of impact on compliance and audits when compared to upcoding. If you are trying to avoid audits, the solution is documenting quality care. Procedure codes are one of the few technical indicators that speak toward the quality of care provided to patients. If you intentionally reduce the level of these codes, it indicates that you may have compromised on appropriate treatment.

Here is a common example: A patient has wheezing symptoms and is diagnosed with uncontrolled asthma. The provider increases the prescription and provides an in-office nebulizer treatment. The severity of the condition and treatment with documentation qualifies as high complexity 99215. However, to avoid audit scrutiny, the provider downcodes to moderate complexity 99214, not conveying the true quality of treatment to the payor.

It may seem like a simple action, but if a patient switches to another provider for extensive treatments, providers who downcoded could face litigation for fraudulent medical practices.

Downcoding is not the answer. If a practice wants to code the right level of service for every patient while avoiding audits, they need to:

  1. Invest in education and training sessions to improve the documentation skills of all physicians and practice staff.
  2. Compare procedure code trending by physician/month/year to identify deviations and determine audit samplings.
  3. Perform intense audit to ensure quality of documentation, quality of procedure coding, and research on enhanced reimbursement options.

At Saisystems Health, our AAPC-certified coding team always provides consistent education to our clients and performs trigger and compliance audits on quality samples. This is all in an effort to ease and improve practices’ medical coding procedures.

If you have questions about your levels of coding, reach out today to discover the solutions Saisystems Heath can create for your practice. Contact us at

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