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Upcoding in a National Health Service: the evidence from Portugal

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  • Pedro Barros
  • Gisele Braun

Abstract

For many years, evidence from the USA has pointed out to the existence of upcoding in management practices. Upcoding is defined as classifying patients in diagnosis‐related groups codes associated with larger payments. The incentive for upcoding is not restricted to private providers of care. Conceptually, any patient classification system that is used for payment purposes may be vulnerable to this sort of strategic behaviour by providers. We document here that upcoding occurs in a National Health Service where public hospitals have their payment (budget) tied to the classification of treatment episodes. Using diagnosis‐related groups data from Portugal, we found that the practice of upcoding has been used in the hospitals in a way leading to larger budgets (age of patients plays a key role). The effect is quantitatively small. Copyright © 2016 John Wiley & Sons, Ltd.

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  • Pedro Barros & Gisele Braun, 2017. "Upcoding in a National Health Service: the evidence from Portugal," Health Economics, John Wiley & Sons, Ltd., vol. 26(5), pages 600-618, May.
    • Handle: RePEc:wly:hlthec:v:26:y:2017:i:5:p:600-618
    DOI: 10.1002/hec.3335
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    References listed on IDEAS

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    2. Gisele Teixeira Braun & Luis Gomes Centeno, 2018. "Health Systems," CFP Occasional Papers 01/2018, Portuguese Public Finance Council.
    3. Reif, Simon & Wichert, Sebastian & Wuppermann, Amelie, 2018. "Is it good to be too light? Birth weight thresholds in hospital reimbursement systems," Journal of Health Economics, Elsevier, vol. 59(C), pages 1-25.
    4. Bauhoff, Sebastian & Fischer, Lisa & Göpffarth, Dirk & Wuppermann, Amelie C., 2017. "Plan responses to diagnosis-based payment: Evidence from Germany’s morbidity-based risk adjustment," Journal of Health Economics, Elsevier, vol. 56(C), pages 397-413.
    5. Heike Hennig‐Schmidt & Hendrik Jürges & Daniel Wiesen, 2019. "Dishonesty in health care practice: A behavioral experiment on upcoding in neonatology," Health Economics, John Wiley & Sons, Ltd., vol. 28(3), pages 319-338, March.
    6. Eunhae Shin, 2019. "Hospital responses to price shocks under the prospective payment system," Health Economics, John Wiley & Sons, Ltd., vol. 28(2), pages 245-260, February.
    7. Helen Hayes & Jonathan Stokes & Matt Sutton & Rachel Meacock, 2024. "How do hospitals respond to payment unbundling for diagnostic imaging of suspected cancer patients?," Health Economics, John Wiley & Sons, Ltd., vol. 33(5), pages 823-843, May.
    8. Cook, Amanda & Averett, Susan, 2020. "Do hospitals respond to changing incentive structures? Evidence from Medicare’s 2007 DRG restructuring," Journal of Health Economics, Elsevier, vol. 73(C).
    9. Milstein, Ricarda & Schreyögg, Jonas, 2022. "Activity-based funding based on diagnosis-related groups: The end of an era? A review of payment reforms in the inpatient sector in ten high-income countries," hche Research Papers 28, University of Hamburg, Hamburg Center for Health Economics (hche).
    10. Qian, Mengcen & Zhang, Xinyu & Chen, Yajing & Xu, Su & Ying, Xiaohua, 2021. "The pilot of a new patient classification-based payment system in China: The impact on costs, length of stay and quality," Social Science & Medicine, Elsevier, vol. 289(C).
    11. A. James O'Malley & Thomas A. Bubolz & Jonathan S. Skinner, 2021. "The Diffusion of Health Care Fraud: A Network Analysis," NBER Working Papers 28560, National Bureau of Economic Research, Inc.
    12. Beth Parkinson & Rachel Meacock & Matt Sutton, 2019. "How do hospitals respond to price changes in emergency departments?," Health Economics, John Wiley & Sons, Ltd., vol. 28(7), pages 830-842, July.
    13. András Kiss & Norbert Kiss & Balázs Váradi, 2023. "Do budget constraints limit access to health care? Evidence from PCI treatments in Hungary," International Journal of Health Economics and Management, Springer, vol. 23(2), pages 281-302, June.
    14. Mona Groß & Hendrik Jürges & Daniel Wiesen, 2021. "The effects of audits and fines on upcoding in neonatology," Health Economics, John Wiley & Sons, Ltd., vol. 30(8), pages 1978-1986, August.
    15. Carine Milcent, 2019. "From downcoding to upcoding: DRG based payment in hospitals," Working Papers halshs-02317416, HAL.
    16. Carine Milcent, 2019. "From downcoding to upcoding: DRG based payment in hospitals," PSE Working Papers halshs-02317416, HAL.
    17. Lai, Yi & Fu, Hongqiao & Li, Ling & Yip, Winnie, 2022. "Hospital response to a case-based payment scheme under regional global budget: The case of Guangzhou in China," Social Science & Medicine, Elsevier, vol. 292(C).
    18. Milstein, Ricarda & Schreyögg, Jonas, 2024. "The end of an era? Activity-based funding based on diagnosis-related groups: A review of payment reforms in the inpatient sector in 10 high-income countries," Health Policy, Elsevier, vol. 141(C).

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