8 Most Common Medical Billing and Coding Errors

Did you know that about 50 percent of all Medicare claims are somewhat inaccurate? Medical billing and coding errors are common and consume a lot of time and energy to resolve. Your untrained medical billing and coding staff costs you money if you don't successfully navigate these issues. Unfortunately, the smallest error causes significant damage to the claim and payment processes. These frequent errors reduce transparency and jeopardize your relationships with the patients. Hence, you should focus on finding better ways to deal with these issues to improve operations and customer relations.

What's New

Last updated on .

Consequences of Medical Billing and Coding Errors for Healthcare Practices

Top 10 Ways to Avoid or Overcome Medical Billing and Coding Errors

Consequences of Medical Billing and Coding Errors for Healthcare Practices

Medical billing and coding errors can have significant consequences for healthcare practices, impacting both financial stability and patient care. Some of the key consequences include:

• Financial Losses: Billing errors can result in underpayment or overpayment, leading to significant financial losses for healthcare providers and patients due to incorrect reimbursements or denied claims.
• Delays in Treatment: Billing mistakes can delay claims processing, causing interruptions in patient care or treatment schedules while waiting for approval or payment from insurance companies.
• Legal and Compliance Issues: Errors may violate healthcare regulations (e.g., HIPAA), resulting in legal consequences, audits, penalties, or fines for providers who fail to meet industry standards.
• Damage to Reputation: Frequent billing errors can tarnish a healthcare provider's reputation, leading to a loss of trust from patients, insurance companies, and other healthcare professionals.
• Insurance Claim Denials: Incorrect coding or billing may lead to insurance claim denials, requiring time-consuming re-submissions and disputes with insurers to resolve payment issues.
• Increased Administrative Costs: Fixing billing mistakes involves additional administrative time and resources, leading to increased operational costs and reduced efficiency for healthcare organizations.
• Impact on Patient Care: Mistakes in coding or billing can result in incorrect treatment documentation, potentially impacting the quality of care provided and leading to medical errors or patient dissatisfaction.

Here are Most Common Medical Billing & Coding Errors

1. Inaccurate Procedure Codes

A single wrong tap on the keyboard inputs an incorrect procedure that stores a flawed code in the medical system. This inaccurate code corresponds to faulty information in the form that damages the integrity of your billing system. Hospitals collect a huge claims pile due to the staff's inefficiency to adhere to rules. To avoid these issues, educate your staff by providing enhanced coding training and ensure strict process adherence. Being aware of these common coding errors reduces the chances of repeating such issues.

2. Mishandled Payments

You either lose money or damage credibility when you don't handle payments well. Additionally, you can also deny claims when you don't handle payments well. Claims denial usually occurs because of underpayment or overpayment issues. You need to fix underpaid claims immediately because you could potentially lose revenue because of it. For both sides, any interest payments need proper processing by strictly enforcing the right procedure. You need to find a process to notify the defaulters immediately.

3. Missing Information

Did you know that 3 out of all 10 tests are lost and reordered? Missing information is a real issue plaguing several medical organizations. Among several issues it causes, omitting important information leads to claims denial. Fortunately, you can easily rectify the issue and prevent it from happening in the future. Not checking for mismatches increases your chances of receiving a denied claim. Billing departments usually overlook mismatches because they are extremely busy. However, you need to find a way to address these issues. Being cautious with fields before applying for a claim helps you prevent major medical billing and coding errors. A minute look at the claims form for insignificant details like name, address, gender, insurance information, and birth dates also helps you avoid issues. Furthermore, ensure no incorrect data is entered in the system to process claims faster.

4. Unbundling Errors

Used in medical processes, unbundling reduces a single procedure into different smaller procedures. Some organizations bill these smaller processes separately to deceive their patients into paying higher charges. This act is extremely unethical and causes troubles during audits. When you have a comprehensive code for the entire procedure, you should process the complete process at the same time. You can easily remedy the situation by making your medical coders aware of this error.

5. Upcoding Errors

6. Duplicate Billing

You can face these issues when you bill the same procedure multiple times. Not only does it increase medical costs, but it also results in you re-submitting a claim instead of sending a follow-up claim. You can usually divide these errors into two categories: exact duplicates and suspect duplicates. Both these claims are handled differently by the claims departments. While exact duplicates are denied right away, suspect duplicates are put on hold by concerned authorities. However, both these errors cost your coding and billing team significant time and effort to rectify these errors.

7. Outdated References

Keeping your staff updated with the latest codes is critical to maintaining the sanctity of your billing system. Different code references need regular upgrading to stay relevant. If you don't replace outdated references with new ones, you can lose revenue because of it. Using outdated codes increases the work hours needed to fix these issues. This delay can make you lose eligibility to participate in different pay-for-performance programs that offer several financial incentives. Being up-to-date with the working terminologies helps your patients and staff be eligible for many important incentives.

8. Digit Transposing

An accidental switch between two numbers while typing fast can disrupt the claims and payment processing in the medical coding systems. This error occurs while entering numerical data like birth date or ID numbers. You can easily avoid these issues by asking your staff to double-check the entered numbers. Ensuring your coding software provides useful prompts to check the information before processing claims also improves your chances of reducing such errors.

Top 10 Ways to Avoid or Overcome Medical Billing and Coding Errors

Here are effective ways to overcome medical billing and coding errors:

• Regular Staff Training
  Ensure coders and billers receive ongoing training to stay updated on coding changes, billing regulations, and payer-specific guidelines to reduce errors and improve compliance.
• Use Updated Codebooks and Software
  Implement the latest ICD, CPT, and HCPCS codebooks and maintain updated billing software to avoid outdated or incorrect codes that can lead to claim rejections.
• Double-Check Patient Information
  Verify patient demographics, insurance details, and medical records for accuracy before submitting claims to prevent rejections caused by incomplete or incorrect data.
• Conduct Pre-Billing Audits
  Regularly review claims for potential errors, such as mismatched codes or missing documentation, before submission to ensure accuracy and minimize denials.
• Follow Up on Claims Promptly
  Monitor claim statuses and address denials or rejections quickly by identifying the issue and resubmitting corrected claims within payer deadlines.
• Understand Insurance Payer Policies
  Familiarize yourself with different insurance carriers’ rules, including pre-authorization requirements, coverage limitations, and specific coding guidelines to avoid unnecessary errors.
• Maintain Proper Documentation
  Ensure all medical procedures and services are well-documented with supporting details to justify coding and billing decisions during audits or disputes.
• Automate Error Detection
  Leverage billing software with built-in error-checking tools that flag potential coding discrepancies and missing information before claims are submitted.
• Schedule Regular Compliance Audits
  Conduct periodic internal or third-party audits to identify and address recurring issues, ensuring adherence to industry standards and payer requirements.
• Improve Communication Between Teams
  Foster collaboration between medical providers, coders, and billing staff to clarify procedures, documentation, and coding to minimize misunderstandings and errors.

Conclusion

Each medical error costs an average of $13,000. Imagine the devastating compounding effects of this huge sum for multiple errors! The future of medical billing and coding lies in advanced automation, AI-driven analytics, and strict compliance with evolving regulations. However, managing these processes is complex due to frequent regulatory updates, intricate coding standards, and the need for error-free documentation to avoid claim denials. These complexities necessitate third-party providers to ensure seamless, accurate, and timely billing and coding, allowing healthcare providers to focus on patient care.

Invensis is a trusted name in delivering efficient medical billing services using state-of-the-art software solutions. Our offerings include accurate medical coding, claims submission, denial management, and revenue cycle optimization. We leverage advanced tools and a team of experienced professionals to ensure compliance with HIPAA and other healthcare regulations. By outsourcing to Invensis, healthcare providers can reduce administrative burdens, improve cash flow, and enhance patient satisfaction.

Contact us today to streamline your medical billing and coding processes!