7 Most Common Medical Billing Errors

Medical billing and coding is an incredibly complex field, and that complexity grows with each passing year. Even a simple ER visit can involve multiple stakeholders and dozens of billable items. Studies have found 49% to 80% of medical bills carry at least one error, and while some errors may be due to fraud, there’s enormous room for overbilling just from honest mistakes.

It’s a lot to keep track of, whether you’re a billing and coding specialist, patient, or plan administrator. The Alaffia Health team is here to help with a look at some of the most common billing and coding errors that result in overbilling. 

Skilled Nursing Facility Visits

Skilled Nursing Facility (SNF) claims often lead to overpayments, with Health and Human Services and the U.S. Department of Justice having recovered $47 million from SNF facilities in 2018 alone. SNF claims are based on the number of patient visits, which provides ample incentive to bill for more visits than medically necessary. SNF claim reviews are becoming increasingly important for cost control by health insurance plans and other coverage providers. 

Upcoding

All medical procedures have a specific code; upcoding is when the code for a more complex or expensive procedure is applied to a bill in place of the proper code. Whether by accident or with fraudulent intent, upcoding can lead to substantially inflated bills for healthcare. 

Even tiny differences in treatment can mean a large monetary difference in billing. For example, CPT code 14000 is applied for closure of a wound that measures 10 square centimeters or less. CPT code 14001 applies to wound closures of 10.1–30 square centimeters. A slight discrepancy in the wound’s size can equal an enormous difference when the treatment is billed. 

Medical Drug Dosage: Units Billed Vs. Administered

A provider submitting a drug administration claim must ensure the units billed match the dosage indicated in the Healthcare Common Procedure Coding System (HCPCS) and the volume administered to the patient, including properly discarded wastage.

This is a tough error to catch; one must examine the claims data alongside the patient’s actual medical record in order to identify the error and recover any overpayment. 

Modifier 59

Modifiers are added to CRT codes to provide context or additional description for a procedure or service rendered. Modifier 59 – distinct procedural service is used to show that a procedure or service was conducted independently of other procedures or services performed during the same visit or on the same day. It is often used to identify procedures and services that aren’t normally reported together but are considered appropriate for the circumstances. 

Modifier 59 is one of the most misused modifiers in medical coding. Improper use of modifier 59 often prevents a service from being bundled or added to another service, inflating the billing amount. For example, a procedure or service that is customarily understood as included with another service may be coded separately with modifier 59 added. 

In order to use modifier 59 properly, documentation should be included in the patient’s medical file substantiating its use. A lack of documentation may show that the healthcare provider overbilled for that patient’s care. 

Outpatient or Inpatient? 

Generally, outpatient care is less expensive than inpatient care and earns the provider a lower reimbursement rate. Medical bills can be artificially inflated when outpatient services and procedures are incorrectly coded as inpatient procedures and services. A clinical reviewer can often identify overbilling by reviewing claims and medical records of inpatient services and procedures to determine whether the details are consistent and accurate.

Providers use a Diagnosis-Related Group (DRG) to classify patients into clinically similar groups. This helps standardize hospital and physician payments and optimizes resource management and delivery of care. DRGs are most commonly used with Medicare and Medicaid reimbursement, but may apply to other payers as well. 

DRG coding is a common source of overbilling. Sometimes, patients are coded with a more severe condition than what they were treated for. In other cases, simple clerical errors cause discrepancies. Either way, minor differences in a diagnosis can mean a major difference in the billable amount.

Telemedicine Coding

Telemedicine has become more popular since the beginning of the COVID-19 pandemic, with 50% more remote telehealth visits in the first quarter of 2020 compared to 2019. While telemedicine expands access to quality healthcare for patients in remote areas or with accessibility issues, it also creates billing complications. 

Telemedicine is a relatively new field, and some medical billing and coding specialists may not be familiar with the codes or modifiers used. The variety of different modifiers used for real-time or asynchronous services can also create confusion, leading to errors. 

Healthcare Billing Errors and Cost Control

These seven common billing errors account for millions of dollars in overbilling every year. Identifying these and other errors allows healthcare payers to maintain payment integrity, prevent and recover overpayments, and control costs. 
A strong payment integrity partner enables payers to reduce fraud, waste, and abuse, and stay competitive in the rapidly changing healthcare field. Ready to eliminate overpayments and achieve cost clarity? Alaffia Health can help!

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