Top 5 Medical Billing Mistakes and How to Avoid Them

Top 5 Medical Billing Mistakes and How to Avoid Them

Billing mistakes are common in medical practice. However, they can be costly and lead to serious financial problems and loss of revenue if not addressed quickly. The following are some of the most common errors that lead to denied claims and how to avoid them:

  1. Failure to Verify Insurance - One of the top reasons medical claims are denied is the failure to verify insurance. Insurance changes often, even for the most regular patients, so it is imperative that a practice verify insurance each time services are provided. Some of the most common denials include services not authorized or covered by plan, insurance that has been terminated or no longer eligible, and maximum benefits been met. To avoid having these issues be sure staff understands the importance of verifying every patient’s insurance, including effective dates, coverage period, deductibles, and copayments. There are software programs available that can assist with these functions and save the practice valuable time, money and labor.
  2. Incomplete or Incorrect Patient Information - Another very common reason for denials is from errors and inaccuracy. This often happens during the patient registration process. Whether it is the misspelling of a name, wrong date of birth, or incorrect diagnosis code, the smallest details can be the cause of a delayed payment or a denied claim. To ensure payment is made the first time, have the front office staff assist by double-checking these details. Encourage them to verify insurance coverage and benefits over the phone, when a patient calls for an appointment.
  3. Using Wrong Diagnosis or Procedure Codes - Coding mistakes occur when a claim is submitted to the insurance company with the incorrect diagnosis or procedure code. There are many reasons this could happen, such as handwriting mistakes or using outdated codes. One way to improve accuracy and reduce mistakes is by switching from a paper-based system to an electronic health record (EHR).
  4. Inaccurate or Duplicate Billing - Billing more than once for the same procedure, test, or treatment is called duplicate billing. For example, if a patients test is canceled but it was never removed from their account, or a practice bills for the wrong service or a service not performed. Usually, these errors are considered mistakes or human error. To prevent this from happening, a practice should periodically perform chart audits to ensure all claims have been billed correctly.
  5. Upcoding or Unbundling - Purposely inflating the level of service or procedure performed to receive a higher reimbursement rate or charging for a different service than what was provided is called upcoding. Billing for procedures separately that are generally billed as a single charge is called unbundling. These are both examples of healthcare fraud that can be subject to hefty penalties or even federal prison.

While billing mistakes are common in the medical industry, according to a report from Medical Group Management Association (MGMA) the higher performing medical groups on average have around a 4% denial rate. Set a goal for the practice and encourage the entire staff to help in preventing and reducing these costly errors and oversights.