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LUGPA Policy Brief: No UPCODE Act (S. 1105)

July 2025 

S. 1105, the No Unreasonable Payments, Coding, or Diagnoses for the Elderly Act (No UPCODE Act), introduced on March 25, 2025, by Senators Bill Cassidy (R-LA) and Jeff Merkley (D-OR), aims to reform the risk adjustment methodology under Medicare Advantage (MA) to ensure fair and accurate payments. The legislation targets problematic coding practices such as upcoding, which artificially inflate risk scores and distort reimbursement levels without corresponding increases in patient care needs.

Upcoding involves assigning higher-severity diagnosis codes to patient records, inaccurately reflecting conditions as more severe than they are. This practice boosts Medicare Advantage payments without corresponding increases in patient care needs, thereby distorting reimbursement levels.

Key Provisions

1. Use of Two Years of Diagnostic Data:
Starting in 2026, the Secretary of Health and Human Services (HHS) will incorporate two years of diagnostic data, where available, for risk adjustment in Medicare Advantage. This approach enhances accuracy by utilizing a broader dataset to evaluate patient health status.

2. Exclusion of Diagnoses from Chart Reviews and Health Risk Assessments:
Effective from 2026 onwards, diagnoses derived from chart reviews or health risk assessments will not influence Medicare Advantage payment adjustments. This measure aims to combat upcoding by ensuring that payment calculations reflect diagnoses based on actual patient encounters. HHS will establish procedures to verify and validate diagnoses from these sources to ensure compliance with regulations.

3. Coding Adjustment Enhancements:
Starting in 2026, HHS will evaluate coding pattern disparities between Medicare Advantage plans and traditional Medicare (Parts A and B) providers. Findings will be publicly disclosed, and adjustments to risk scores at the plan or contract level will account for coding discrepancies, including upcoding. This measure aims to ensure payment accuracy aligned with true patient health risks.

Implications for LUGPA Members

  • Payment Accuracy: Addressing upcoding enhances payment fairness in Medicare Advantage, potentially impacting reimbursement levels for urology practices.
  • Data Integrity: Excluding chart reviews and health risk assessments from payment adjustments may reduce administrative burdens, but highlights the importance of robust clinical documentation during patient encounters.
  • Increased Oversight: Public reporting on coding practices may heighten scrutiny of Medicare Advantage plans, influencing negotiations and contracts with urology groups.
  • Practice Management: LUGPA members should prioritize accurate clinical documentation to support diagnoses. Reviewing and refining coding processes is essential to mitigate unintentional upcoding risks.