Medical billing and medical coding are the two pillars of healthcare revenue cycle management. Medical billing errors hurt patients as well as practices. For patients, billing mistakes cause financial problems, annoyance and dissatisfaction. For practices, even small errors can cause payment delays and denials, and have a major impact on their bottom line. According to a recent ResearchAndMarkets.com report, over 20% of a physician’s revenue ends up becoming lost due to loopholes and mistakes in the medical billing process. The support of an experienced medical billing service provider is crucial to avoid unpaid or denied claims. In fact, the rising demand for efficient and skilled medical billing professionals can be explained by the increasing need to make billing process more efficient.
What are the common medical billing errors and what steps can medical practices take to address them?
- Failure to capture patient information: The medical billing process usually starts with patient scheduling and patient registration. Getting the most accurate patient information up front provides the basis for billing claims and collecting payment in the most effective manner. Lack of or incorrect patient demographic information can lead to claim denial. Incorrect or missing patient names, addresses, birth dates, insurance information, etc., can all cause problems. According to a Claim Remedi survey, about 8 percent of claims submitted are rejected because of eligibility problems. In addition to entering patient demographic information correctly in the practice’s billing system, insurance eligibility verification is necessary to confirm patients’ health insurance status and coverage.
- Not informing patients about their financial responsibility: With high-deductible plans, patient responsibility has increased. A TransUnion Healthcare study found that patients saw an 11 percent increase in average out-of-pocket costs in 2017, while a 2017 Black Book survey reported that patients have experienced a nearly 30 percent increase in deductible and out-of-pocket maximum costs since 2015, with out-of-pocket costs exceeding over $4,400. Not informing patients about their financial responsibility will make it difficult for practices to collect what they owe. All practices need to have proper tools and workflow processes in place for collecting payments upfront from patients with high-deductible health plans. Here are some expert suggestions to improve collection:
- Communicate clearly and in simple language so that patients will understand what is expected of them.
- Educate patients about insurance and out-of-pocket expenses, that is, about how much their insurance will cover and how much of their care they will have to cover themselves
- Surgical centers should discuss patient financial responsibility in pre-operative communications
- Offer payment options
- Not coding to the highest degree of specificity: Using non-specific diagnostic codes and incorrect modifiers are common reasons for claim denials. While physicians should ensure their documentation reflects services performed, medical coders need to assign the most specific diagnosis codes. Insurance companies make payment determinations based on the specificity of reported codes. Choosing the most specific code requires choosing the maximum number of digits possible in a category and the most appropriate descriptor of the patient’s condition. Payers reject claims that are not coded to the highest degree of specificity. Failure to include other necessary claim information, such as the incident date related to an injury or accident, can also lead to claim denials. Other coding errors include:
- Not using procedure codes correctly and failure to use a modifier when needed are other coding issues that mean denied claims.
- Upcoding and undercoding are other errors to look out for. Upcoding reporting a higher-level service or procedure than patients received or bills are submitted for services that were never performed. Undercoding is when the codes billed do not signify the full scope of the work performed by the physician. Undercoding can result in the loss of revenue.
- Mismatch of diagnosis and treatment code: Using a diagnosis code that is not compatible with a procedure code is a common coding error that can lead to errors in claims and denials.
- Duplicate billing or double billing: Duplicate billing refers to billing a patient for the same service more than once. This can be caused by human error. In some cases, bills may erroneously be submitted for procedures or tests that have been cancelled or rescheduled. Chart audits can help catch these errors.
- Missing the payer submission deadline: Timely filing denial can result from not submitting the initial claim, corrected claim or appeal within the required period. Failure to submit a claim within the specific timeframe forces practices to write off those charges as patients generally cannot be billed when a practice has exceeded the timely filing limits. Practices can avoid this unnecessary denial by maintaining a list of each payer’s filing deadlines for ready reference.
High volume of billing errors in practices can drive patients away and even result in charges of fraud that can lead to heavy penalties. The efforts to reduce claim denials should begin with an analysis to understand the reasons for or source of the denials. Reports of denials should be run on a weekly or monthly basis to assess denial reasons, ICD and CPT codes reported, modifiers, and payers. Analyzing this information can reveal the areas that the practice needs to focus on to avoid billing and coding errors. Partnering with an experienced medical billing and coding company is a proven strategy to ensure accurate and prompt claim submission and prevent reimbursement issues.