There is no way to do this in single query. You have to search the document in first query:
If document exists:
db.bar.update( {user_id : 123456 , "items.item_name" : "my_item_two" } ,
{$inc : {"items.$.price" : 1} } ,
false ,
true);
Else
db.bar.update( {user_id : 123456 } ,
{$addToSet : {"items" : {'item_name' : "my_item_two" , 'price' : 1 }} } ,
false ,
true);
No need to add condition {$ne : "my_item_two" }
.
Also in multithreaded enviourment you have to be careful that only one thread can execute the second (insert case, if document did not found) at a time, otherwise duplicate embed documents will be inserted.