Consequences of Medical Coding & Billing Errors & How to Avoid Them

Medical coding errors lead to higher claim denials, loss of revenue, and federal penalties, fines, and imprisonment. Learn how to protect your emergency medicine group now:

Are the consequences of inaccurate coding and incorrect billing drowning your emergency department?  The fact is, a lot of groups don’t know the extent of the damage it’s having on their groups until, unfortunately, it’s too late!

Basic medical coding errors have the potential to cost your emergency medicine practice hundreds of thousands or more in lost revenue. When the government and insurance companies deny claims with medical billing and coding errors. Your EM group loses reimbursement revenue until you can correct and resubmit a clean claim.

The most common medical billing and coding errors lead to high denial rates and may compromise patient care. But the more serious consequences of upcoding and acts of medical abuse and fraud could have your group facing federal penalties and expensive fines.

So it’s time to start eliminating your medical coding errors, lower denials and rejected claims, and maximize your reimbursements. And it all starts with a basic understanding of why this all matters so much.

Why is Medical Coding Important?

Medical coding is how your practice turns the services you provide into billable revenue. Each service corresponds to its own Current Procedural Terminology (CPT) and Healthcare Common Procedure Coding System codes. Claims for services are then submitted to insurance companies, Medicare, Medicaid, etc. with these codes.

Inaccurate medical coding will cause your reimbursements to get delayed, denied, or only partially paid. Build up a cache of delayed reimbursements and you’ll have mounds of paperwork, stress, and lost revenue for your emergency medicine practice to deal with.

Miscoding a procedure may mean the difference between $15 and $15,000. But it’s not only about the money.

What are the Most Serious Consequences of Inaccurate Coding and Incorrect Billing?

Have a history of incorrect coding and billing mistakes? Your emergency medicine practice may come under intense scrutiny for medical fraud and abuse[*]. And then you’ll  could be facing serious federal penalties and fines.

Medical abuse happens when your team falsifies claims that lead to your practice’s monetary gain, either deliberately or unintentionally. Medical abuse is considered fraud when there’s evidence of intentional misrepresentation over a long time and across a large number of patients.

Submitting incorrect claims to the government (for Medicare or Medicaid) violates the Federal Civil False Claims Act (FCA). The law does not require intent, so mistakes can be costly.

Civil penalties for violating the civil FCA may include recovery of up to three times the amount of damages sustained by the Government as a result of the false claims, plus penalties up to $22,927 (in 2019) per false claim filed[*]. Defraud any government healthcare benefit program and the penalty can even include imprisonment. 

Terrifying as those are, the most common consequence of medical coding and billing errors is not having your claims reimbursed by the insurance companies.

Reasons that Claims Could Be Returned By the Insurance Companies

New, confusing codes within the ICD-10 can create short- and long-term revenue issues if your team doesn’t keep up with the changes. What’s the difference between a denied claim and a rejected claim?

Insurance companies say a denied claim is unpayable. The reasons for denial can include billing errors, missing information, inadequate patient coverage, and more. Your practice will typically receive an Explanation of Benefits (EOBs) with the reason for the denial. Denied claims may be appealed and reprocessed in certain cases.

Rejected claims can be corrected and resubmitted for processing with the insurance company. Claims are most often rejected due to billing and coding errors. But once your team fixes those errors, you can resubmit a clean claim for payment again.

Your emergency medicine group will notice a boost in revenue by following up on your medical denials. And the more you correct, the more you may notice common patterns of medical coding errors surfacing.

The 8 Most Common Medical Coding Errors and How to Prevent Them

Every piece of your claim has to be accurate for a smooth reimbursement. But your team may be committing a few of the most common medical coding errors intentionally or unknowingly, including:

1. Sloppy documentation. When physicians or other healthcare providers turn in sloppy paperwork, it’s difficult for medical billing specialists to assign the right codes and bill patients correctly. Misreading handwriting errors may also contribute to undercoding (another lost revenue stream). 
2. Hurried intake/missed information. Entering incorrect information for providers, patients, and insurance providers is a top mistake. Especially in emergencies, this information can take a backseat in a panicked moment and cause an issue down the road.
3. Unbundling. Using separate codes for linked procedures when there’s a single code for the whole group of procedures is known as unbundling. This illegal act increases the total claim amount (and inflates your profit).
4. Upcoding. Upcoding happens when your team uses a billing code for a more complicated or expensive service than what was actually done. This also includes tests done by techs being coded as performed by physicians. Since more serious codes demand higher payments, this illegally inflates your revenue too.
5. Undercoding. Undercoding happens when patients are not billed for all the treatment or services rendered. This suspicious practice may help a patient avoid a high-cost bill or help your emergency department avoid audits. It also costs your EM group money.
6. Duplicate billing. This occurs when your staff bills the same patient for the same service multiple times though it was only performed once. 
7. Overusing the modifier 22-increased procedural services. Using this means the patient’s procedure required more work than normal, which would come with an increase in price. This needs proper documentation to prove/get approved.
8. Improper infusion and hydration codes reporting. To bill for these services without a denial, you’ll need accurate documentation for start and stop times.

These are just a handful of the most common medical coding and billing errors. Any of them could be the reason why your denial or rejection rates remain high. But they don’t have to be a thorn in your side forever.

How To Correct Medical Billing Errors Before they Happen

The best claims management software not only provides real-time clean claims stats but also boasts intelligent features to spot mistakes before claims are submitted and denied. Investing in software like this should be your first priority. Then your emergency medicine group should:

Train Your Team On The Most Common Medical Claim Denial Reasons

It takes a watchful eye to avoid most medical billing errors before they leave your department. Here’s a list of denials in medical billing you can avoid with strict due-diligence:

  1. Missing information
  2. Service not covered by payer
  3. Duplicate claim or service
  4. Service already adjudicated
  5. Limit for filing has expired

Additionally, it’s imperative to continue training for your team since medical billing codes change all the time. This will help them stay up to date on the latest and most specific codes to use. And it will also lower your denial rate.

Maintain a Low Denial Rate

Your emergency medicine group’s denial rate shows how much more profitable you should be. It’s also a reflection of your Revenue Cycle Management process.

Maintaining a low denial rate takes a ton of work, especially with all the constantly changing regulations, rules, and medical billing codes. If you’re not keeping up with your denials, you may consider hiring in-house staff to help. But outsourcing this task to experts who specialize in medical billing will be more cost-effective.

Outsource Emergency Department Billing and Coding

Medical coding is an immense amount of work for even the most experienced teams to handle. Small errors here and there have the potential to cause major damage. That’s why many groups outsource emergency department services.

The benefits of outsourcing hospital ER billing include:

  1. Fewer errors
  2. Better focus for your staff
  3. Lower expenses
  4. Enhanced patient satisfaction
  5. Better cash flow
  6. Higher revenue
  7. Easier adherence to compliance
  8. Greater consistency

You’ll also receive comprehensive services to handle the nuts and bolts of the billing process from beginning to end. Hand off this chore to the experts and you’ll decrease insurance denials and boost your cash flow. Then you can get back to running your emergency department. 

However, not all medical billing services are created equally.

Beware the Significant Negative Impact of Offshoring Your ED Coding 

There’s a critical distinction between outsourcing — contracting work to an external, specialized organization — and offshoring — getting work performed in a different country.

Despite the competitively low prices, offshored medical billing and coding partners are much less likely to be in compliance than those based in the US. And that puts your practice at risk. 

There’s a strong correlation between improper evaluation and management (E/M) claims being paid in error than other Part B services with offshore partners. According to a Department of Health and Human Services report, Medicare inappropriately paid almost $7 billion for improper coding or claims with lacking documentation in 2010[*]. 

This has resulted in the Department of Health and Human Services publishing recommendations that include the following[*]:

  • Physicians being better educated on coding and documentation requirements
  • Erroneous claims for E/M services followed up on
  • Physician groups encouraged to have contractors review E/M services billed for by high-coding physicians

Inadequate regular compliance oversight is a contributing factor here. But rather than hold your practice at the whim of a discount coding and compliance contractor to save a few dollars month-to-month, think of your long-term goals as a sustainable and compliant provider to ensure accuracy and profitability now and into the future. 

Practices should have professionals in place who are aware of the ever-changing compliance rules, and audits should be performed regularly. If you outsource coding already, ask your billing and coding partner the hard questions to determine if they meet the recommendations set forth by the Department of Health and your personal scrutiny.

See What DuvaSawko Can Do For Your Emergency Department’s Medical Coding and Billing Errors

Today’s independent emergency groups are tasked with more challenges than ever. Handling increasing operational costs, decreasing reimbursements, and fewer opportunities for expanding revenue sources are just a few of your daily stresses.

So why add keeping up with the ever-changing medical codes and required documentation to your plate? Or allocate expensive in-house resources to follow up on denied and erroneous claims?

Inaccurate coding leads to inaccurate reimbursement, and in some cases, legal action against your practice.​ The best way to avoid the consequences of medical coding and billing errors is to partner with a team of experts that specializes in emergency medicine revenue cycle management.

 

Our team at DuvaSawko minimizes errors while maximizing reimbursements. We have a 99% success rate in overturning denials and collect 30% more for our clients, on average. 

 

In our quest to impact the US economy, all our coders are US-based DuvaSawko employees. We don’t use contractors of any kind to get the job done. Our quality control and compliance program was designed to adhere to all relevant standards, ensure staff is properly trained, monitor the constantly changing regulatory environment, and implement timely changes to maintain compliance. 

 

See what our team at DuvaSawko can do for your emergency medicine group today. Contact us at 888-311-8760. Or click HERE to receive your complimentary practice analysis now!

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