Medical billing mistakes are not uncommon. Unfortunately, even those that may appear to be small errors can have a pretty huge impact resulting in delayed payments, claim denials, customer complaints and lost productivity. This is true regardless of whether a healthcare provider is associated with a private medical practice, hospital, local health department or a local health organization.

The good news is that many mistakes in medical billing can be avoided with increased diligence and attention to detail. Below we’ve outlined some of the more common mistakes we see and how to prevent them. 

Failure to Verify Insurance

Insurance issues are the top reason for insurance claim denials. Simply put, failure to verify insurance may lead a provider to render services to an individual who is not covered by insurance on the date of service.

The associated claim results in both a potential loss of revenue (if the individual cannot pay, then the provider faces a bad debt write-off) and inefficient use of resources (both the time to submit the claim as well as the time to resubmit a denied claim or seek payment from the client).

Typically, failure to verify insurance is rooted in reliance on routine. Staff may assume that coverage for a patient who visited last week has not changed. In reality, insurance information can change at any time, so verification is a critical first checkpoint in the billing process for every single patient visit. This means the provider must verify eligibility prior to rendering services for every patient at the beginning of every visit for every service. 

Filing an Incomplete Claim

A single empty or unchecked box on a claim may be all it takes to incur a denial. Even the most basic fields like gender, date of birth, or date of service are commonly left blank, triggering a claim denial.

 The billing process involves the creation and submission of multiple electronic forms or paper documents. With the advent of electronic health records (EHR), many medical billing systems allow for insurance documentation to be stored in a database or electronic format. Nevertheless, whether a provider uses an EHR system or paper forms, errors can arise in filling out claims due to missing information.

Providers must be diligent in collecting accurate and reliable information ensuring that they collect all required information. Stringent protocols and procedures must be in place to accurately capture patient information and input the data to the EHR or paper form. At the base level, the best remedy to avoid omissions is to have a second set of eyes (at minimum) reviewing claim information on each and every paper or electronic claim filed by the provider to ensure all required fields are completed accurately. If a provider works exclusively with electronic claims, then a check system should be in place for the software system to ensure the software flags users to review missing fields and input all required information before enabling submission. In many cases, it may make the most sense to increase staff dedicated to billing or partner with an outside contractor to provide revenue management oversight with respect to submitting insurance claims. 

Coding Errors

Recent changes to procedural and diagnostic coding systems place an extra strain on limited billing staff resources. Inexperienced staff might fail to recognize the appropriate codes and coding patterns, which will lead to medical billing mistakes and claim denials. Coding errors can arise in a number of different areas, but the net result remains an inefficient use of resources and potential for loss of revenue.

Submission of an insurance claim requires an accurate depiction of the services provided to the client. The claim conveys the services provided by using different diagnostic and procedural codes. Third-party payers currently rely on the existing Current Procedural Terminology (CPT) coding system developed by the American Medical Association (AMA) and the Healthcare Common Procedure Coding System (HCPCS) developed by the Centers for Medicare and Medicaid Services (CMS).  The purpose of these coding systems is to provide a uniform language to describe medical, surgical, and diagnostic services and serves as an effective means for reliable nationwide communication among health care providers, patients and third parties.

Errors arise when providers or billing staff make mistakes entering CPT or HCPCS codes on claim forms. Errors can occur both from lack of knowledge (e.g., when a provider writes down the wrong code or code sequence) or human error (e.g., perhaps billing staff accidentally enters the wrong code). In either case, the result can be a denial of claim or potentially failure to pay for all services rendered.

Including an internal manual review to check over codes helps eliminate mistakes stemming from human error. Increasing medical coding training for provider staff would help ensure correct codes are applied. Another solution is always to work with trained professionals or outsource billing to a third-party medical billing service. 

Lack of Specificity

Similar to coding errors, billing errors related to lack of specificity arise in the context of submitting an insurance claim without enough detail to warrant reimbursement. The most common errors include not providing all of the required information on procedural or diagnostic codes, which creates ambiguity and ultimately, leads to claim denial.

With respect to diagnostic codes, third-party payers often deny claims for not being coded to the highest level of specificity or for being truncated (e.g., unnecessarily or incorrectly shortened). Trained medical billing coders understand that each diagnosis must be coded to the highest level for that code, meaning the maximum number of digits for the code being used. If provider staff responsible for submitting insurance claims is not highly familiar with coding, the provider faces an increased likelihood of claim denial.

Providers can minimize the risk of this type of billing error by training staff to recognize when there is a lack of specificity in the billing codes. The most common errors include leaving off critical digits or letters (truncation), using an incorrect code from a prior version or transposing numbers or letters in listing out the codes for a particular visit.

 Missing or Incorrect Modifiers

In addition to the CPT, modifiers must be billed appropriately. It is extremely common for claims to be denied for lacking a modifier or applying an invalid modifier.

Modifiers provide details for the CPT. These additional codes can determine the exact nature of the reason for an evaluation and management code (whether it be an office visit or hospital visit) during a post-operative global period, indicate where on the body a procedure was performed (left/right side, specific finger/toe digit), and “unbundle” multiple services performed on the same date or visit.

If billing staff is not familiar with the process of including modifiers, it’s common for them to simply adjust off the charges on procedures that would – if coded correctly – very easily pay. Without the modifiers whole claims may be denied. Properly trained and knowledgeable staff know that a denied claim may not necessarily mean nonpayment. There are steps that can easily be taken to resubmit a claim, or an appeal when necessary, to correct the claim and generate payment by the addition of modifier(s).

Again, increased training for staff is the best way to combat this error, which usually stems from a lack of knowledge. A second pair of eyes prior to submission is also helpful to ensure all modifiers have been applied.

Missing Filing Deadlines

Third-party payers can have drastically different windows in which providers can file insurance claims. As a result, providers that do not maintain awareness of timely filing deadlines are subject to claim denials. In some cases, previous errors can lead to situations where even if a provider submits a revised and correct claim, the third-party payer will still deny the claim because the resubmission falls outside the required filing window.

Provider staff must constantly be aware of filing deadlines – and know to check time restrictions as well as how and where to find this information.  

As medical billing increases in complexity in an ever-changing world of healthcare, so do the pitfalls and errors that can undermine the efficient use of provider resources. Medical billing errors and mistakes can have a significant impact on all parties to a medical transaction, including both the patient and the provider. From a patient perspective, medical billing errors can lead to financial hardships and a loss of trust in a provider. From the provider perspective, errors and mistakes can lead to revenue loss, expending extra resources to rectify mistakes, and a reputation risk related to providing quality medical care.

The best ways to remedy medical billing mistakes are working with well-trained professionals, increasing medical billing training for staff, working with third-party medical billing professionals (i.e., outsourcing), putting in action well-documented processes and protocols for medical billing, and increasing internal audits to determine where a provider is succeeding and failing with respect to medical billing mistakes.