7 Common Medical Billing Errors

Medical billing errors might mean that a patient’s treatment is coded as a procedure that is not covered by insurance, so they are left with a hefty bill.   We’ve compiled some common medical billing errors and medical coding errors, so you can get an idea of where issues usually arise in this profession.

• Upcoding: This error happens when a medical billing code is incorrectly used to reflect a more severe treatment or diagnosis. Upcoding is against the law and may cause a patient’s bill to be very inflated. Some examples of upcoding include coding for a name-brand medication when a generic medication is distributed to the patient. Another example is when a regular office visit is coded as inpatient care.
• Unbundling: Sometimes patient charges fall together under one billing code, and that is called bundling. But unbundling is when charges that would typically be grouped together under the same code are listed separately, inflating the patient’s bill.
• Duplicate Billing: This means that a patient is billed for the same service more than once. Sometimes this medical billing error is made when a doctor and a nurse indicate that the patient should be billed, duplicating the billing for that prescription. Sometimes patients are inaccurately billed for multiple “first days” in a hospital, which typically cost more than the following days at the same hospital. This is unfortunately a very common billing mistake that elevates patients’ bills.
• Balance Billing: This error occurs when a patient has a leftover balance after the claim is submitted to the insurance company by a doctor’s office or hospital. A patient should check with their insurance company to see if all of the charges are covered in their policy, and if so, the balance on the bill is illegal to charge.
• Lack of Medical Necessity: If a doctor doesn’t provide a medical coder with correct information about a patient’s diagnosis, the wrong code may be used on the bill, and an insurance company may deny coverage, citing a “lack of medical necessity.”
• Incorrect Patient Information: If a patient’s name is misspelled or an insurance number is incorrect, this could cause the claim to be rejected by the insurance company. Unfortunately, these errors are common since, between the healthcare facility and the insurance company, many people may be handling one claim.
• Mismatched Treatment/Diagnosis Codes: If a medical biller upcodes a patient’s diagnosis, but doesn’t change the treatment code, an insurance company will usually reject the claim because the treatment code and diagnosis code doesn’t match.

Now that we know where many of the common medical billing and coding errors come from, let’s see what the experts say about fixing and avoiding these costly mistakes.

Adria Gross, who has been in the insurance industry for 25 years and opened MedWise Billing, Inc.  

MedWise Billing, Inc is a medical billing service company that works with individuals assist in reviewing medical bills to recoup reimbursements, understand EOBs, and file medical claims, healthcare providers to expediting medical claims and with insurance credentialing, and attorneys in auditing and analyzing liens on personal injury claims.  

Adria stresses that when verifying coverage, you need to:

1. Request whether pre-authorization is required
2. Identify what specific coverages the patient has
3. Know the deductible
4. Know the copay
5. Know the address where to submit the bills
6. Know the limitation on visits
7.  Know the maximum amount of coverage for the procedure. Many medical policies still have maximum payout for certain procedures.
8. Make sure not to duplicate bills

Katie Fowler, a quality review manager for Amphion Medical Solutions notes that it is imporant for medical coders to be able to know when to ask physicians for further clarification:

Coders are challenged with meeting production rates, which often leaves them rushed to complete lengthy complex charts, leading to costly mistakes when diagnosis codes are not gathered correctly. Unclear documentation from physicians often complicates the rush. An example is a diagnosis of pneumonia when lab results show a sputum culture positive for a specific bacteria organism. The physician has viewed the lab results and prescribed the appropriate meds to treat the pneumonia, which was caused by bacteria, but he only documents “pneumonia” in the chart. This leads to an unspecified diagnosis code for pneumonia.  If the documentation clearly stated pneumonia due to bacteria or bacterial pneumonia, a more specific code could have been assigned, thereby positively impacting reimbursement.

Coders must carefully perform research throughout an encounter/chart to ensure they locate all conditions documented by the physician as impacting the stay (hospital stay). Physician documentation is not always clear and direct, so coders must be able to piece together the puzzle and know when to ask physicians for further clarification as to whether a condition was present and impacting the stay. A coder must understand anatomy and physiology in order to determine what pieces of the puzzle may be related and when to query the physician further clarification. 

The American Association of Professional Coders (AAPC) indicates that accuracy is essential:

Claims are often denied because the patient is not eligible for coverage. The medical practice should have a procedure to gather insurance information from the patient, including copies of the front and back of the insurance card.  The insurance information should then be verified at each visit. With modern electronic tools, daily eligibility verification should be run for patients being seen that day. 

Medical code sets are typically updated annually. Some medical practices will avoid purchasing new medical code books each year to reduce costs. However, when outdated codes are used, claims can be denied. If a code is deleted in 2014, it cannot be used for a 2014 date of service. 

Accuracy is essential in the medical billing and coding profession and staying aware of industry changes, the latest in medical billing and coding software, and changes to mandated regulations are important parts of the job. Caring about the job you perform and performing it well is a value that can help all professionals—not just medical billing and coding professionals—to avoid costly mistakes.