The effect of a law limiting upcoding on hospital admissions: evidence from Italy

Policy makers have made several attempts to limit hospitals’ upcoding. We investigate the impact of a law introducing a minimum length of stay for discharges with complications. We analyze its effects on the probability of a discharge with complications, on its length of stay and on its reimbursement. We show that the policy has been effective in limiting upcoding, since, after the law, (1) the probability of a discharge with complications has decreased by 3%; (2) its length of stay has risen by 0.17 days more than the observed corresponding variation in the length of stay of a discharge in the control group; (3) the hospital’s revenue on a discharge with complications has decreased by 8.5% more than the observed revenue change on a discharge in the control group. Furthermore, we find evidence of an ownership effect on upcoding, since not-for-profit and for-profit hospitals have been more affected by the law than public hospitals.