Top 5 Medical Billing Errors

Billing errors can be the cause of many claim denials and medical office financial problems. Delayed payments, costly fines, and loss of revenue can all occur when errors are not caught ahead of time. If your medical office is experiencing financial difficulties, it may be necessary to review your claims for the most common billing mistakes before billing your claims out.


Failure to Verify Insurance

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The number one reason why most medical billing claims are denied is a result of not verifying insurance coverage. Because insurance information can change at any time, even for regular patients, it is important that the provider verify the member's eligibility each and every time services are provided. There are four common denials associated with insurance verification:

  1. Members coverage terminated or not eligible for this date of service
  2. Services not authorized
  3. Services not covered by plan benefits
  4. Maximum benefits met

Inaccurate or Incomplete Patient Information

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Simple inaccuracies in patient information can lead to billing denials. The smallest details are important to getting medical bills paid the first time. The front office staff can help reduce these denials by checking the following details of the patient chart:

  • Is the patient’s name spelled correctly?
  • Is the patient’s date of birth and sex correct?
  • Is the correct insurance payer entered?
  • Is the policy number valid?
  • Does the claim require a group number to be entered?
  • Is the patient relationship status to the insured accurate?
  • Does the diagnosis code correspond with the procedure performed?
  • Does the procedure code for the service that was performed match the authorization obtained?
  • For multiple insurances, is the primary insurance accurate for coordination of benefits?

Denials due to any of the inaccuracies above can be re-filed but instead of a 14-day payment turn around, it could take up to 30 to 45 days to finally get paid.


Incorrect Diagnosis or Procedure Codes

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Coding claims accurately let the insurance payer know the symptoms, illness or injury of the patient and the method of treatment performed by the physician. Coding mistakes occur when the claim is submitted to the insurance company with the wrong diagnosis or procedure code on the claim. The may cause the claim to be denied for reasons such as no medical necessity or procedure does not match authorization.

Other reasons why the wrong diagnosis code or procedure code could end up on the claim:

  • Using old coding books. Coding books should be updated yearly due to the changes in coding. Replacing coding books can be expensive but is not worth losing out on revenue due to unnecessary denials.
  • Handwriting mistakes. It seems silly but poor physician penmanship is one of the leading causes of billing errors each year. One way to improve accuracy is by switching from a paper-based system to an electronic health record (EHR).

Duplicate or Wrongful Billing

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Duplicate billing is billing for the same procedure, test, or treatment more than once. Similar mistakes can be billing for the wrong service or billing for services never performed. Sometimes a procedure or test is canceled but never removed from the patient account. Most of the time, these types of mistakes are due to a simple human error. However, many facilities are fined each year for committing fraud for this very reason. Fraud is considered as willingly and knowingly filing medical claims that are inaccurate.

One way to prevent inaccuracy in medical billing is by performing chart audits. Chart audits are a simple way to make sure that all parts of a claim are billed correctly.


Upcoding or Unbundling

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Misrepresenting a level of service or procedure performed in order to charge more or receive a higher reimbursement rate is considered upcoding. Upcoding also occurs when a service performed is not covered by Medicare but the provider bills a covered service in its place.

Some services are considered all inclusive. Unbundling is billing for procedures separately that are normally billed as a single charge. For example, a provider bills for two unilateral screening mammograms, instead of billing for 1 bilateral screening mammogram.

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