13 Most Common Medical Billing Errors and How to Avoid and Fix Them
Even a simple and small error in medical billing cause substantial denial in claim reimbursement, adversely affecting the practice’s bottom line, which depends on the healthcare provider’s continuous reimbursement. The ultimate guide for the most common medical billing errors for health practitioners and billers. Let’s explore the 13 usual coding and provide solutions to avoid them.
1. Inaccurate Patient Information
A significant and initial phase of the healthcare industry is patient demographics. One of the most common medical billing errors is entering inaccurate patient data, like name, date of birth, medical history, or insurance coverage information. If front office staff enter the wrong patient insurance id in the software in result, these errors lead to delayed or rejected claims.
To avoid this, ensure that front desk staff take the time to check patient eligibility and update patient data correctly at every visit.
2. Coding Errors
As every coder and practice knows that how much CPT codes are important in the billing process for individual practices or hospitals. Coding errors, such as syntax errors, logic errors, or accidental oversight. Any kind of mistake in CPT (Current Procedural Terminology) and ICD-10 (International Classification of Diseases) codes could cause claims to be denied or underpayments.
Regularly train and educate billing personnel to stay up-to-date with code guidelines and updates.
3. Upcoding or Downcoding
UpCoding Billing Error:
Code inflation or overcoding is also called medical upcoding. The most common medical billing error is upcoding which could be a fraudulent practice. For example, a biller or coder intentionally submits code for an expensive service that is not actually served by the practitioners. In some cases upcoding is used to get more reimbursement from insurance companies or by healthcare programs.
Billing staff should adhere to strict coding guidelines, accurately document services rendered, and bill appropriately based on the level of care provided to ensure compliance with the law and maintain the integrity of the healthcare system.
Downcoding Billing Errors
Downcoding can happen due to a variety of reasons, like the fact that billing personnel or insurance companies interpret documentation differently and resulting in the assignment of lower codes. It can also happen due to insufficient or incomplete documentation that does not allow for the higher-level code.
The effects of downcoding could be detrimental financially for healthcare providers since they are reimbursed less than they’re entitled to based on the actual services rendered. Downcoding can also cause disputes between insurance companies and healthcare providers which can delay payments and impact the revenue cycle of the provider.
To avoid the possibility of down coding, Healthcare providers must keep complete and precise documentation of each patient visit with clear explanations of the services rendered and the medical need for the procedures that are performed.
4. Unbundling Coding Error
Unbundling is when several steps that are meant to be charged as a single bill are invoiced separately. This may result in increased reimbursement, but it is considered to be illegal and can lead to penalties. Unbundling occurs when the coder enters code for already performed claims. As a result, healthcare providers charge a higher rate.
Use billing software that has built-in checks to identify the unbundling process and prevent it.
5. Duplicate Billing Charges
When a healthcare facility or billing company submits a claim for possibly exact service being paid more than one time. This billing error can happen by accident or due to administrative oversight,
Duplicate billing charges can result in various problems:
Overpayment
If a payer processes and reimburses multiple claims and the healthcare provider is paid greater reimbursement than what they’re entitled to for one service, which results in an overpayment.
Claim Denials
In certain situations, the insurer or payer might find multiple claims and reject them altogether, leading to delays in the payment process and the requirement to submit a new claim.
Audits and Penalties
Recurring instances of billing charges that are duplicates can raise questions about billing practices, prompting audits from insurance companies or healthcare programs.
Fines and penalties can be imposed if duplications are found to be deliberate or a result of negligence.
6. Failure to Obtain Prior Authorization
Specific treatments and procedures require prior approval from insurance companies. In the event of not obtaining authorization, it could result in claims being denied.
Ensure your employees are well informed about the pre-authorization requirements of various insurance plans.
7. Missed Filing Deadlines
The timely submission of claims is vital to ensure prompt reimbursement. Failure to submit claims by the deadline can result in claims rejection. It depends on patient visits, time and changes in medical history, which requires regular updation with accuracy.
Create a well-organized billing schedule to prevent delays in the submission of claims.
8. Lack of Documentation
There must be more documentation of the services provided to avoid denials of claims or downcoding. The unavailability of a single document cause trouble for providers and patients, and minor negligence create a massive burden on practice RCM.
Your healthcare provider should keep complete and precise notes for each patient visit.
9. Coordination of Benefits (COB) Errors
If a patient is covered by multiple insurance plans, the coordination of benefits is required to determine which payer is the primary. Failure to identify primary and secondary payers could result in billing mistakes.
Create a system to monitor and verify COB accurately.
10. Inadequate Follow-Up on Claims
The claims may need to be completed in the process of billing. Regular follow-ups are tracking of applications that are in operation. Follow-ups escape you from wasting time and delay in approvals.
Always follow up on claims to make sure they are processed and address any issues as soon as they arise.
11. Duplicate Billing Charges
A situation in which the medical or healthcare facility is unable to confirm the insurance coverage of a patient before providing medical treatment.
This can result in numerous reimbursement and billing concerns for the healthcare provider and the patient.
12. Data Entry Mistakes
The mistakes in data entry is the most common medical billing error made while putting patient and health details into the billing system. These errors can happen at different stages, from recording patients’ demographics to addressing treatment codes and diagnoses.
Errors in data entry can result in severe effects, affecting the quality of medical claims and resulting in reimbursement and billing issues.
13. Ignoring Denials
The practice of ignoring denials in medical billing is an expensive and risky mistake that could have dire negative consequences for healthcare providers. Denials are in cases where insurance companies cannot cover certain medical procedures or treatments and cite various reasons like improper coding, absence of medical necessity, or insufficient information.
Denials that are not addressed can result in significant financial losses and could even lead to compliance and legal issues. Here are some reasons not addressing denials is a problem:
Financial Losses
Neglecting denials could leave money to be squandered. If denied claims aren’t properly handled and resubmitted in time, the healthcare provider might not receive reimbursement for services rendered, leading to financial loss.
Compliance Issues
Not heeding denials can cause issues with compliance if a healthcare provider isn’t following the rules and regulations laid by insurance companies or government payers. This could result in penalties providers or facilities may face legal action.
Overpayment
Constantly ignoring denials can harm the reputation of the healthcare provider. Patients may lose confidence in the healthcare provider if they feel a lack of responsiveness or professionalism when handling billing issues.
Conclusion
In the end, avoidance and correction of the most common errors in medical billing are vital for the financial security and reputation of healthcare providers. The most frequent 13 billing errors discussed here, including incorrect patient information, code errors, downcoding or upcoding, unbundling, or ignoring denials, can have severe consequences if not addressed. Healthcare professionals should prioritize accuracy in data entry, proper codes, and thorough documentation to avoid these errors.
To avoid making these mistakes continuing education and instruction for billing personnel is essential, and they should know the latest billing guidelines and coding rules. Implementing efficient billing systems with integrated checks can aid in identifying errors before making claims. Regular follow-up on claims and a meticulous examination of billing processes can drastically reduce denials and enhance the revenue cycle.
FAQS
Medical billing errors that are not adequately handled can result in the rejection of claims or payment delays, financial losses, and compliance issues. To correct these common errors in medical billing must adhere to a standardized procedure. Also, you should contact the insurance company for assistance in changing the information submitted.
The first step in correcting medical billing mistakes is identifying the precise errors. This is done by looking over the billing reports by reviewing them using software or manually auditing. After setting up, you can follow the guidelines and modify them in accordance with the recommendations.
Healthcare facilities may face delayed payments, impaired cash flow, financial loss, compliance, and legal issues due to billing errors. Physicians and their practices can face severe consequences, including reputation damage.
In medical billing, up to 75% of bills are rejected due to coding errors. Infact 44% errors in
