Sample Essay Paper on the Impact of Over-Coding and Under-Coding on Monitoring Length of Stay

Hospitals under-code the services furnished to beneficiaries as a way to avoid audits. A pre-billing technique is to ensure that the coder review between the actual length of stay and geometric mean length of stay (GMLOS). When the actual length of stay is less than the geometric mean length of stay, a review of discharge disposition is carried out leading to exaggeration of the patent’s length of stay records (Liu & Codde, 2001). Moreover, if major or minor complications conditions are treated during the stay meeting the reporting criteria for secondary diagnosis, over-coding provides for an extended length of stay, more nursing care and usage of more resources for investigation and treatment. Additionally, over-coding lies in health profession clinical documentation improvement and thus shows a lack of coder knowledge of disease process thus prolonging the length of stay of the patient.

On the other hand, over-coding may result to the length of stay exceeding GMLOS causing an increase in discharge disposition whereby the patient is charged extra cost for the additional days in their length of stay at the facility. Under-coding  may be as a result of the coder’s  failure to take time to query the patient well and may cause coder reduce the number of days the patient is supposed to take in the hospital.

The impact of over-coding and under-coding on normal pathology results.

Over-coding of pathology reports may result to exaggeration of the report’s finding requiring the practice to send tissue specimen from the patient to an outside reference laboratory and bills the patient directly with no pass-through billing (Shah & Williams, 2011). Since codes of the laboratory reports are billed in units, over-coding will result to an increase in the bill of the patient.

However, Coding from diagnostic reports is dependent on the physician documentation. Therefore, under-coding such reports result to wrong diagnosis and treatment. For instance, coding breast cancer as a benign whereas it is malignant results to wrong treatment schedule for the patient. Another case is where by the physician under-code breast cancer as a breast lump, therefore, fails to follow a complete cancer stage form for chemotherapy treatment.

The impact of over-coding and under-coding an unnecessary medication.

The over coding of Current Procedural Terminology is a method of coding with an intention of reporting unnecessary treatment in order to get a higher pay. The misrepresenting level of service or treatment makes the provider bill a covered service in its place thus resulting to up-coding of the treatment. Unbundling occurs when procedures normally billed as a single charge are billed separately leading to higher payment from the patient. For example, both over and under-coding makes a provider bill for tow unilateral screening mammogram instead of one bilateral screening mammogram.

Application of Diagnosis Related Groups (DRG’s) and Cost Weight methodology.

The use of Diagnosis Related Groups (DRGs) in hospitals payment uses part of perspective per-case payment whereby, all prospective hospital payment system has fixed rates of payment based on hospital admission and not on the number of days the care was provided, and types of services offered. Payment by DRGs encourages access to care, rewards efficiency, increases transparency, ensures improvement in fairness by paying similarly across hospitals for similar care.DRG payment application ensures a reduction in the cost of each inpatient hospital stay and increase the number of inpatient admissions. However, the cost weight methodology provides for resource utilization weighting variables (Goldfield, 2010).  Depending on the episode such as typical stay, short stay and long stay, a slightly different weighting approach is used. The DRG payment is adjusted to take into consideration the application of wage index, indirect medical education costs, cost outliers and disproportionate share payments for low-income patients.

The impact of incomplete documentation on the health record.

Documentation that fails to concisely convey the problem of the patient and the logic used in addressing the problem risks patients’ safety. It also hinders any effort to estimate the quality of the rendered care. Failure to document health record result to incorrect treatment decisions; expensive, painful and unnecessary diagnostic study and, the unclear communication link between consultants and the referring physicians resulting to failure in follow-up of evaluation and treatment plans.

Managing length of stay is an effective way of reducing both undercharging and overcharging of the patient. Therefore, there will be a constant expenditure within the facility resulting to management of risks such as quality of care. Medication errors are accompanied by cost reports thus increasing the healthcare spending. Quality improvement advocates for assessment and evaluation of the case reports to determine the adequacy, completeness, accuracy and reasonableness of the data recorded to minimize health facility spending. This will enhance quality, human resource, and utilization management within the facility.



There is a need to carry out further research on health care coding to equip the coders with the knowledge that will enhance an increase in the evidence-base and promote the use of current coding evidence. This will result to an improvement in the coding system. Provision of health insurance coverage for the patient need to be taken into consideration to ensure that patient’s cost of healthcare services is well covered. Moreover, there is a need for monitoring documentation of health record and accurate entries to ensure effectiveness and efficiency in healthcare system at large.


Managed care means managing the process of care and not managing physicians and nurses. Therefore, the main f quality improvement in healthcare is to improve the quality of care by reducing medical errors, managing unnecessary diagnostic tests that result to unnecessary medication. The central goal of health care quality improvement is to maintain what is good about the existing healthcare system while focusing on the areas such as poor record keeping, over coding and under coding that need improvement.



Goldfield, N. (2010). The evolution of diagnosis‐related groups (DRGs): from its beginnings in    case‐mix and resource use theory, to its implementation for payment and now for its        current utilization for quality within and outside the hospital. Quality Management in             Healthcare, 19(1), 3-16.

Liu, Y., Phillips, M., & Codde, J. (2001). Factors influencing patients’ length of stay. Australian   Health Review, 24(2), 63-70.

Shah, S. K., Fleet, T. M., Williams, V., Smith, A. Y., Skipper, B., & Wiggins, C. (2011). SEER                standards result in underestimation of positive surgical margin incidence at radical     prostatectomy: results of a systematic audit. The Journal of urology, 186(3), 855-859.