Abstract: Based on Diagnosis-Intervention Packet (DIP) payment reform, this article explores up-coding behavior of hospitals, and provides reference for the implementation of medical insurance payment reform. Under the background of DIP payment reform, this article focuses on the behavior of upcoding, constructs an extensible asymmetric dynamic evolutionary game model to reveal the key factors of violations. The discoveries of this research include that: (1) Increasing penalty severity and amplifying reputational damage are conducive to curbing hospitals' up-coding behaviors; Lowering regulatory costs, increasing penalty severity, and enhancing regulatory returns serve to promote medical insurance' supervision; Reducing the cost of complaints and improving the benefits of complaints provide protection for patients' complaints. (2) The probability of patients' complaints increases with the increase of the probability of hospitals' upcoding; The probability of hospitals' upcoding decreases with the increase of the probability of supervision by medical insurance; The probability of supervision by medical insurance increases with the decrease of the probability of complaints from patients. (3) The ultimate driving force of upcoding comes from positive extra income, which is not directly related to whether medical insurance and patients are under supervision. Under the current management regulations of DIP in China, the internal driving force of hospitals' upcoding is insufficient. Therefore, there is no stable equilibrium point in reality.