Common Medical Billing Errors and Fraudulent Practices

by | Last updated Dec 7, 2023 | Published on Sep 12, 2014 | Medical Billing

Common Medical Billing Errors
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According to the 2013 Bloomberg ranking of nations having the most efficient healthcare systems, the United States finished in the 46th position among the 48 countries included. A study published in the Journal of General Medicine in 2013 says that around 25% of all senior American citizens are bankrupt because of high medical expenses while 43% are in a grave situation being on the verge of mortgaging or selling their primary residence to pay their medical bills. It is partly because even if you are insured, some amount should be paid from your own pocket in the form of coinsurance, co-payments and deductibles. However, the real culprits that create chaos in the U.S. healthcare system are medical billing errors and fraudulent practices.

The errors that cause a surprisingly large hospital bill with the insurer saying ‘no’ to pay all of it may be accidental mistakes. Such errors can create real problems for both patients and hospitals. The common billing errors are as follows.

  • Duplicate Billing – Sometimes hospitals may charge twice for the same procedures, supplies or medications. An itemized bill will help to identify such kinds of mistakes.
  • Duration of Stay – Most hospitals charge patients for the day they arrive, but not for the day they leave. Thoroughly check the dates of patient admission and discharge and make sure that you are not charging them for the day they checked out from the hospital.
  • Price Charged for the Room – Ensure that you are charging patients the right price for the type of room. Sometimes patients staying in a shared room are charged the rate for a private room.
  • Time Spent in the OR – The average time required to perform an operation is often taken as the criterion for billing. Ensure that patients are being charged accurately for the same so that no discrepancy is noticed in case a comparison is made with the anesthesiologist’s records at some stage to determine the OR charges.
  • Up Coding – At certain times, providers may change an order for an expensive medication and/or service to one that costs less. Check whether patients are being billed at a higher rate even after that or billed for both the expensive and cheaper versions.
  • Overlooked Keystrokes – If the medical staffs slipped or overlooked some keystrokes while typing on the keyboard, significant mistakes including overcharges can happen.
  • Canceled Services – In certain cases, a pre-arranged medication, procedure or service canceled later may be shown in the patient’s final invoice. Be vigilant to such kind of mistakes.

With the help of a professional medical billing and coding company that provides the service of experienced AAPC certified coders, healthcare providers can avoid these kinds of errors to a great extent and relieve their patients from cost burden. Such a company would handle the billing tasks more efficiently and accurately with a good revenue cycle management team.

Fraudulent Billing Practices – A Nightmare for the U.S. Healthcare System

The federal Health Care Financing Administration (authority which oversees Medicare) estimates that the government loses 30 cents to every dollar because of the fraudulent practices in the medical community. The famous TIME Magazine article ‘Bitter Pill: Why Medical Bills Are Killing Us’ by Steven Brill gives a clear insight into such malpractices. The most common fraudulent practices prevalent are:

  • Unbundling – The federal Health Care Financing Administration cites certain hospitals are indulging in practices such as unbundling to raise the cost of their services. Unbundling means billing treatments separately when they should be billed as a single combined charge.
  • Overcharging – There are allegations that several not-for-profit hospitals in the United States deliberately overcharge uninsured and underinsured patients although maintaining their tax exempt status. These hospitals would take oppressive collection practices to recover this inflated medical debt while providing relaxation to Medicare or Medicaid patients. Steven Brill says in his article that certain hospitals would charge $283.00 for simple chest X-rays if the patients have no coverage whereas a Medicare patient would pay only $20.44 for the same.

However, Brill gives some suggestions that would curtail medical billing frauds and allow U.S. to provide better healthcare services at lower costs. These measures include restricting the prices of prescription drugs, recapturing the profits from hospitals having expenses of about a third of healthcare costs, implementing 5% cut on hospital and physician costs, reducing the spending on outpatient clinics and labs owned by doctors, using transparency and emboldening comparative – effectiveness evaluations in decisions to prescribe drugs, tests and medical equipment.

Natalie Tornese

Holding a CPC certification from the American Academy of Professional Coders (AAPC), Natalie is a seasoned professional actively managing medical billing, medical coding, verification, and authorization services at OSI.

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