A Closer Look at Common Medical Billing Errors

Posted on July 31st, 2023 / Under Medical Billing / With No Comments

Medical billers and coders deal with thousands of codes when documenting procedures and other relevant treatments provided to patients, making medical billing errors inevitable in some cases. However, when these errors occur, they can impact the claims process, leading to denied claims or delayed reimbursement, resulting in a loss of revenue.

Typically, errors in medical billing occur due to basic mistakes made during the entire billing process, such as miscoding or misreporting. Understanding the reasons behind the most common medical billing errors can help minimize them, optimize the revenue cycle, and keep your patients satisfied.

Common Medical Billing Errors:

Duplicate Billing:

Duplicate billing is a common medical billing error that occurs when a patient gets billed more than once for the same procedure. This type of billing can be a mistake or can be done intentionally, which is also known as medical billing fraud.

For instance, if you have to repeat a procedure on the same day and there is a modifier misuse, such as not using modifier 76 in the bill, it will result in a duplicate billing mistake. Frequent duplicate billing can lead to rejected claims and negatively impact the facility’s reputation.

Undercoding:

Undercoding is another common error in medical billing, resulting in the codes added to the bill not fully reflecting the extent of services provided to the patient. The National Correct Coding Initiative necessitates that physicians must always use the CPT/HCPCS codes that accurately describe the services rendered rather than reporting less comprehensive codes.

This error typically occurs due to miscoding or if the provider is trying to avoid a denial or an audit. It’s crucial to prevent underbilling a patient in any situation, even if done as a sympathetic act towards a financially struggling patient, as it can lead to fraud charges and revenue loss.

Unbundling:

Unbundling is when a provider does not use a comprehensive code to bill a single procedure and instead uses separate CPT codes for it, resulting in overbilling the patient. Medical billing errors such as unbundling can be tricky to identify. If fragmenting billing codes is done intentionally to increase reimbursements from Medicaid or Medicare, it would be considered fraud and lead to legal repercussions.

Missed Deadlines:

Most insurance companies have strict deadlines for filing a claim, and some deadlines can be as stringent as 30 days. There can also be a limited timeline to follow up with claims and correct any billing errors. If a claim is denied because it was not filed on time, it can make the process of appealing the denial more complicated. To expedite the reimbursement process, ensure that you do not miss the deadline for filing medical claims.

Insurance Verification Issues:

One of the biggest reasons most medical claims are denied is insurance verification issues. This issue often stems from overreliance on pre-existing information and routine.

For example, suppose a patient frequently visits a facility to acquire treatment. In that case, the providers or staff can presume that their insurance information has not changed and fail to verify their eligibility. This can cause multiple issues, including the Coordination of Benefits (COB) error, which occurs when the patient has more than one insurance provider.

Missing or Incorrect Documentation:

Even the most basic errors, such as spelling mistakes or adding the wrong patient ID number into the medical billing software, can leave you with correcting patient information and resubmitting claims after denials. Missing or incorrect information, such as patient, provider, or insurance information, is one of the most common medical billing errors.

Ways to Prevent Medical Billing Errors:

Here are some ways you can prevent errors in medical billing:

1. Update Your Practice’s Fee Schedule: Working on the existing fee schedule can cause your practice to suffer revenue loss, as reimbursement rates may vary when working with different insurance providers. Update the fee schedule to avoid any discrepancies.
2. Implement EDI: Implementing electronic data interchange (EDI) will streamline the billing process by reducing the amount of time it takes a bill to be processed and improving accuracy in medical billing.
3. Accounts Receivable Analysis: Accounts Receivable (AR) analysis will help you recover any overdue payments and conduct follow-up procedures to resolve denied claims.
4. Double-Check Forms Before Filing Claims: Double-checking all forms to ensure the patient, insurance, and provider information is correct before you proceed to file a claim can save you from the headache of dealing with delayed payments and denied claims.
5. Medical Billing Audits: Compliance issues and fraudulent claims can be avoided through medical billing audits. It will also improve collaboration among the team, enhance patient care, and help you identify improper billing practices and coding errors.

FAQs:

How do coding errors impact the billing process, and how can they be avoided?

Incorrect coding can lead to several problems, including fractional or delayed payments, increasing the claim processing timeline, instigating audits by the insurance company, and increasing the possibility of fraud charges. Coding errors can be avoided by training staff to stay updated with current coding requirements, ensure precise documentation, and improve staff collaboration.

What are some effective denial management strategies to prevent revenue loss?

By identifying core reasons for claim denials, implementing modern technology to address the issue of miscoding, training the staff to avoid billing errors, and regularly performing audits, you can minimize the risk of revenue loss in your healthcare facility.

How can advancements in technology and software improve billing accuracy?

Automating the coding process can minimize errors that would otherwise occur through manual coding, such as underbilling or overbilling. The use of technology such as electronic health records (EHRs) has significantly improved billing accuracy by streamlining data entry.

What is the role of medical billing audits in identifying and rectifying errors?

Medical billing audits include systematically reviewing coding and billing practices, which helps improve the accuracy of the billing process by ensuring compliance, correcting billing mistakes, and identifying any discrepancies.

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