Unveiling the Most Common Pitfalls of Medical Billing

by | Last updated Aug 8, 2023 | Published on Jul 14, 2023 | Insurance Verification and Authorizations, Medical Billing

Common Pitfalls of Medical Billing
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This is an update to the blog post “Common Medical Billing Mistakes

Medical billing errors are a prevalent issue and can be costly and time-consuming. Becker’s Hospital Review found in 2016, a staggering 80% of American medical bills had some sort of error in them, resulting in billions of dollars in erroneous debt. Navigating the complexities of America’s diverse medical insurance models and varying provider billing procedures can pose a considerable challenge. That’s why most healthcare providers rely on outsourced medical billing services to prevent errors, streamline claim submission, improve revenue cycles, and enhance overall practice efficiency.

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Complex Medical Billing Processes increase Possibility of Errors

Medical billing involves a range of complex processes, from patient registration and insurance eligibility verification to medical coding, charge capture, claim submission and adjudication, payment posting, and denial management. Ensuring that these processes are carried out correctly is essential to ensure healthcare services are accurately documented, coded, billed, and reimbursed. However, errors can occur at various stages. Here are some common medical billing mistakes that can occur:

  1. Incorrect patient information: Incorrect patient details can lead to claim denials or delays. Examples include misspelling the patient’s name, entering an incorrect date of birth, or using outdated insurance information.
  2. Coding errors: Medical coding errors include using incorrect diagnosis or procedure codes, upcoding (billing for a more expensive service than performed), or unbundling (billing separate codes for services that should be billed together). Using outdated codes can result in under or overbilling. These mistakes can result in claim rejections or underpayment and audits. Assigning codes based on assumptions rather than documentation is another error to watch out for. To prevent inaccurate billing and potential legal issues, it is important to ensure that the codes assigned accurately reflect the services provided and are supported by the documentation.
  3. Documentation issues: Missing or incomplete documentation can lead to claim denials or difficulties in supporting the medical necessity of a procedure. Examples include missing or incomplete patient charts, lack of evidence of medical necessity, not providing detailed procedure notes, or incomplete medical history documentation. Incomplete records often lack crucial details such as the patient’s medical history, reason for the visit, or services rendered. Illegible records pose challenges for billers to accurately code and bill for services, resulting in errors. Consistency between documentation and billed services is another critical aspect. If the documentation does not align accurately with the services provided, it can lead to claim denials or audits.
  4. Not verifying patient eligibility upfront: Failing to verify patient insurance eligibility prior to providing services can result in claim denials or patient billing disputes. For example, if a patient’s insurance coverage has lapsed or doesn’t cover a specific procedure, the claim may be denied.
  5. Failure to follow payer guidelines: Different insurance payers have specific billing guidelines and requirements. Failing to adhere to these guidelines can result in claim denials. Examples include not obtaining prior authorization when required or not following specific coding rules set by the payer.
  6. Inaccurate charge entry: This refers to mistakes made when recording charges for medical services rendered. Entering incorrect charges can lead to billing errors and potential compliance issues. While undercharging refers to inaccurately entering charges at a lower amount than what should be billed, overcharging occurs when charges are entered at a higher amount than what is justified or documented. Undercharging not only impacts immediate reimbursement but also affects the overall financial health of the practice. Mistakes in recording the units or quantities of services provided, such as billing for four units of a procedure when only two were performed can result in overcharging and potential billing disputes.
  7. Missing timely filing deadlines: Failing to submit claims within the required timeframe can result in claim denials or reduced reimbursement. It is essential to understand and adhere to the specific timelines set by payers.
  8. Improper handling of denials: Mishandling claim denials, such as not appealing valid denials or failing to identify and address recurring denial trends, can result in lost revenue and increased administrative burdens.

To mitigate these mistakes, it is crucial to establish robust billing processes, train staff on accurate coding and documentation practices, regularly review billing procedures, and implement effective quality control measures to catch and rectify errors promptly. Additionally, staying updated with changing payer guidelines and industry regulations is essential for accurate and compliant medical billing practices.

Stay on Top of the Game with Outsourced Medical Billing Services

Utilizing outsourced medical billing services is a viable strategy to prevent errors, improve revenue cycle management, and optimize reimbursement.

Professional medical billing outsourcing companies are knowledgeable about intricacies of medical coding, billing regulations, and insurance claim processes. They also stay up-to-date with ever-changing healthcare regulations, ensuring compliance with HIPAA, coding guidelines, and billing requirements. Their focus is on ensuring timely claim submission, accurate coding, and efficient follow-up on outstanding claims. By minimizing claim denials, reducing payment delays, and optimizing reimbursement rates, partnering with an expert can enhance your revenue collection and cash flow.

Leveraging the services of an external provider saves costs by eliminating the expenses associated with employee salaries, benefits, and ongoing training as well as the need to invest in software systems for billing. Outsourcing medical billing also allows your staff to focus on delivering quality patient care rather than dealing with complex billing tasks, dedicate more attention to patient satisfaction, medical treatments, and overall practice management.

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  • Natalie Tornese
    Natalie Tornese
    CPC: Director of Revenue Cycle Management

    Natalie joined MOS’ Revenue Cycle Management Division in October 2011. She brings twenty five years of hands on management experience to the company.

  • Meghann Drella
    Meghann Drella
    CPC: Senior Solutions Manager: Practice and RCM

    Meghann joined MOS’ Revenue Cycle Management Division in February of 2013. She is CPC certified with the American Academy of Professional Coders (AAPC).

  • Amber Darst
    Amber Darst
    Solutions Manager: Practice and RCM

    Hired for her dental expertise, Amber brings a wealth of knowledge and understanding of the dental revenue cycle management (RCM) services to MOS.

  • Loralee Kapp
    Loralee Kapp
    Solutions Manager: Practice and RCM

    Loralee joined MOS’ Revenue Cycle Management Division in October 2021. She has over five years of experience in medical coding and Health Information Management practices.