The Basics of Compliance and How It Affects You

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We have received many inquiries on the appropriateness of various Healthcare Common Procedure Coding System/Current Procedural Terminology Codes (HCPCS/CPT Codes) for different levels of care.

Don’t sweat it. We are here to help!


Did You Know?

Hansei has access to hundreds of certified coders through our sister company. If you have any questions, please reach out.

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What is Upcoding?

Upcoding can be described as the practice of coding for a service that is more acute, complex, or different than the service that was rendered — with the intention of getting more money. This practice can be construed by insurance companies and state regulators as fraud. But, it can be prevented.

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The Golden Rules of Coding Appropriately

The more that healthcare changes, so do the coding that goes along with it. In summary, to always keep us on track, there are two rules of thumb no matter what when it comes to coding and documentation.

  • Providers must code based on the documentation.
  • Providers must report the HCPCS/CPT code that describes the procedure performed to the greatest specificity possible. An HCPCS/CPT code must only be reported if ALL services described by the code are performed.


How to Determine Which Code is Billed

The more that healthcare changes, so do the coding that goes along with it. In summary, to always keep us on track, there are two rules of thumb no matter what when it comes to coding and documentation.

Myth vs. Fact

If insurance pays, then the coding combination is approved.


Insurance companies often process claims based on something akin to the “honor system.” We’ve found that post-payment audits for incorrect coding usually take 6-18 months after the payment is issued.

So, though these coding practices may appear to get you paid more for your services in the short run, they can be detrimental to your business and livelihood. They can also restrict cash flow (when an insurer puts you under pre-payment review), result in recoupments/refund requests, and you and your company may incur penalties associated with insurance fraud.


You can bill any coding combination that “seems” appropriate.


You must use the most appropriate code with the greatest specificity. When in doubt, ask a certified coder.


Let’s put this knowledge into practice.

We asked our certified coders to create some common scenarios providers face and help determine the correct answers. Can you spot the right solutions?

Scenario #1

Service: California, substance use disorder residential treatment in a DHCS licensed facility.

A) H0018: Behavioral health; short-term residential (non-hospital residential treatment program), without room and board, per diem.

B) H0017: Behavioral health; residential (hospital residential treatment program), without room and board, per diem.

C) H0019: Behavioral health; long-term residential (non-medical, non-acute care in a residential treatment program where the client stays is typically longer than 30 days), without room and board, per diem.

Hansei’s certified coders indicated that the Correct Answer is A.
B would not work because it’s for hospital residential. C would not work because it’s for stays typically longer than 30 days.

Scenario #2

Service: California partial hospitalization for substance use disorders (5 days a week, min 4 hours per day).

A) H0035: Mental health partial hospitalization, treatment, less than 24 hours.

B) S0201: Partial hospitalization services, less than 24 hours, per diem.

C) S9475: Ambulatory setting substance abuse treatment or detoxification services, per diem.

D) H2036: Alcohol and/or other drug treatment program, per diem

E) H0016: Alcohol and/or drug services; medical/somatic (medical intervention in ambulatory set).

Hansei’s certified coders indicated that, though tricky, the correct Answer is B. They were able to identify S0201 as the most accurate code by doing the following:

  • Contacting the auditors of the top five payors (BCBS, Cigna, UHC, Aetna, and Magellan).
  • Reviewed each of the payor’s guidelines

The outcome of this research was that for PHP in California, the codes with the most specificity were S0201 and H0035. Cigna also permitted the use of H2036. Over the phone, the payors that our coder contacted [BCBS, Cigna, UHC, Aetna, and Magellan] indicated that using S9475 and/or H0016 for the described services would likely trigger a post-payment audit, which could result in refund requests, pre-payment review, and/or a fraud action.

Hansei values doing the right thing.

In advocating for both providers and patients, we work to provide information that helps you get paid for the work you do while remaining compliant and ethical along the way.

We aren’t here to fight the payors. Instead, we are here to help work through the inequities related to insurance that withhold access to treatment for your patients.

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Hansei is not contractually or legally responsible for assigning accurate billing codes, levels of service, or procedure classifications. Nothing in this page should be construed as Hansei assigning a code for the services a provider renders, or assuming responsibility over the assignment of codes.

This page is for general informational purposes only. If you have further questions, please contact a certified coder.

References to “our coders” and “Hansei’s coders” set forth in this flier refer to employees and contractors of Hansei’s affiliate, which employs and contracts with certified coders. These coders are not Hansei employees.