Coding errors are a significant problem in the healthcare industry. According to Healthcare Business & Technology, every year medical providers lose more than a billion dollars, and one of the primary factors is linked to billing errors due to incorrect coding. Coding errors have a severe impact on a healthcare facility’s bottom line and can have legal and financial consequences as well.
Impact of Coding Errors
Healthcare is a multi-trillion-dollar industry, yet each year healthcare providers struggle due to poor billing practices directly related to coding errors. Underpayment, overpayment, and legal exposure are common consequences associated with billing errors. Here are some ways incorrect billing can have an impact.
- Underpayment means the healthcare provider is one of those collectively losing about $125 billion per year per Healthcare Business & Technology.
- Overpayment can be considered a false claim and, if deemed to be the case and/or the coding errors are consistent, it can be deemed as fraud and treated as such.
- Healthcare providers who are wrongly paid for their services can face legal consequences under the False Claims Act.
To avoid these costly problems, it is important medical facilities and provider’s offices correctly enter the codes associated with a patient’s diagnosis and procedure. For this to happen, underlying causes must be identified. These can be linked to a number of things, such as the coder, provider documentation, computer systems, or even an institutional problem.
Coder Lacks Knowledge or Experience
If the person doing the coding does not have sufficient clinical knowledge of disease process, knowledge of coding convention, and application of coding guidelines and coding advice, this could potentially lead to errors in the billing process being made. Ineffective work habits, such as selecting ICD-10 from the index instead of the tabular list, is another root cause.
A healthcare provider can avoid many of these problems by hiring certified medical billing coders. This doesn’t necessarily solve all problems but will go a long way towards ensuring correct codes are entered since professionals should possess strong knowledge about the process and with experience, they should be able to identify any red flags made by other underlying causes associated with errors.
Provider’s Documentation Contains Problems
Providers often inadvertently contribute to medical billing errors. For instance, if they provide the coder with incomplete or conflicting documentation, this can result in the billing person entering the wrong codes into the system. Late documentation by the provider or non-specific documentation are also common contributors to wrongful billing. Upcoding is another problem. For instance, if the provider meets with the patient for a few minutes to do a med check, but bills for a full hour physical exam, this could potentially create a compliance risk for the medical practice. A competent biller can help avoid many of these problems associated with provider documentation because he or she will notice the documentation does not support the level of visit selected by the provider.
Computer Systems are Outdated
Technology has emerged to be a major disruptor in the healthcare industry. It is important for healthcare facilities and providers to ensure their software is up to date. If billing personnel are using older computer software not equipped to accommodate current coding requirements, this can results in problems. For instance, outdated codes in computer systems being used to generate bills will result in incorrect billing and code descriptions will not necessarily match the official code descriptions of ICD-10 codes, CPT, and HCPCS. Additionally, a faulty interface between clinical and billing systems may result in codes not correctly transferring from coding to billing.
Many healthcare providers and facilities turn to third-party billing vendors because of their expertise and the fact they use updated technology. Hospitals, doctors’ offices, and other medical facilities know they are covered from a technology standpoint and they do not have to absorb the cost of upgraded technology themselves.
Institutional Standards are Not Up to Par
Sometimes the root cause of billing errors is linked to institutional policies and practices. For example, if there is an absence of accountability processes, medical staff may be slacking in completing progress notes in a timely manner and providing accurate and complete documentation. Other issues may be a lack of coding quality or regular coding education and training for all staff. These can all lead to colossal billing mistakes.
According to the website Baby Boomers, 30% – 80% of medical bills contain errors. However, connecting with expert certified coders can significantly mitigate the problems associated with coding errors and reduce the number of returned claims or duplicate billing. They understand the fundamentals associated with medical coding and are up to date on the changes occurring in a consistently changing healthcare landscape. In short, they will be diligent and help ensure you are paid correctly, and organizations do not inadvertently break any healthcare laws, ultimately saving both time and money.
Providers who want to avoid coding errors should ensure an up-to-date system is used for billing, policies and procedures are in place for the medical and coding and billing staff, and provider education is offered on a regular basis.
Sources
https://www.ama-assn.org/practice-management/cpt/8-medical-coding-mistakes-could-cost-you
https://www.beckershospitalreview.com/finance/medical-billing-errors-growing-says-medical-billing-advocates-of-america.html
https://www.cms.gov/Research-Statistics-Data-and-Systems/Monitoring-Programs/Medicare-FFS-Compliance-Programs/Medical-Review
https://mticollege.edu/blog/healthcare/medical-billing-and-coding-professional/common-errors-in-medical-billing-and-coding-and-how-to-avoid-them/
https://www.cdc.gov/nchs/icd/icd10cm_pcs_background.htm
https://news.unchealthcare.org/icd10/icd10/content/what-is-icd-10
https://www.physicianspractice.com/view/five-common-coding-errors-medical-practices
https://www.healthitoutcomes.com/doc/the-impact-of-technology-on-medical-billing-and-coding-0001
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