Evidence of Strategic Behavior in Medicare Claims Reporting

Recent Medicare legislation has been directed at improving patient care quality by stopping reimbursement of hospital-acquired conditions (HACs). However, this policy may be undermined if some providers respond by upcoding, a practice where HACs are reported as present-on-admission (POA) to continue receiving full reimbursement. Identifying upcoding behavior from claims data is challenging due to unobservable confounders. Our approach leverages...