Certified Inpatient Coding (CIC) Practice Exam 2025 - Free CIC Practice Questions and Study Guide

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What does "downcoding" in medical billing mean?

Assigning a higher-level code than warranted

Assigning a lower-level code than warranted

Downcoding in medical billing refers to the practice of assigning a lower-level code than what is warranted for the services provided. This action typically leads to a reduced level of reimbursement for the healthcare provider compared to what they might have received if the correct, higher-level code had been applied.

It often occurs as a result of insurers or payers' policies, which may promote a more conservative approach to coding to manage costs. By downcoding, the payer may seek to limit their financial liability or address perceived issues of overbilling.

It's important to understand the implications of downcoding for healthcare providers, as it can significantly affect their revenue cycle and overall financial health. Proper coding is essential for accurate compensation that reflects the complexity and resources involved in patient care.

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Creating a new code for billing errors

Refusing to assign any code

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