How to Avoid Billing Errors

Medical billing is a vital component of the health care industry. Beyond patient care, one of the greatest concerns among health care providers is the business side of the industry, particularly coding and medical billing. Unfortunately, medical billing errors are rampant throughout the industry, and few claims are quite as tricky as mental health, substance abuse and behavioral health services. Diagnoses are complicated. Treatments are complicated. Coverage is complicated. That makes coding for all three incredibly messy, and when claims are messy, they’re often denied. Solving these issues can take long enough to cause critical disruptions in patient care, so providers must do whatever they can to avoid errors.

Errors in Medical Billing

First, it’s important to take stock of the most common reasons for denials and claim rejections. These include clerical errors, outdated information, incorrect or mismatched codes, missed filing deadlines, double billing, undercoding, upcoding and unbundling.

1. Clerical Errors

Clerical errors such as name misspellings or typos in insurance IDs can cause insurance companies to reject claims. Incorrect information can be entered about the provider, such as the name, contact information or address. Incorrect information can also be entered about the insurance company, such as the address, contact information or policy numbers.

Since medical bills can be influenced and changed by dozens of people, these clerical errors are common. A seemingly small mistake by one person can continue through the process and cause issues with the insurance company when the claim is submitted.

2. Outdated Information

As with incorrect information, outdated information for patient, insurer or provider is a billing error that can occur with negligence or oversight. Patients themselves may provide outdated personal information. Claims can be denied when outdated information is present, so ensuring all information is accurate and up-to-date is crucial.

3. Incorrect Quantities

Patients may be accidentally charged for the incorrect quantity of medications or items. An extra zero placed on the end of a number could be a simple mistake that ends up costing the patient a lot more money. Patients who underwent surgery are typically billed in 15-minute increments, so any errors regarding the amount of time spent in the operating room can also quickly add up.

4. Issues With Documentation

What physician has time to make sure they’re writing legibly during their working hours? Unfortunately, messy documentation can result in billing errors. If a physician’s handwriting is illegible, billing staff may find it difficult to read the documentation and assign the right codes.

5. Double Billing

One of the most common medical billing mistakes is double billing, which occurs when medical services or procedures are billed more than once. A nurse and a doctor may both bill a patient for a medication the patient received because they didn’t know the other had already billed the patient. A medication may be billed when it’s prescribed and when it’s administered. Patients may also be billed for several “first days” of their hospital stay, which typically cost more than the subsequent days of a hospital stay. With itemized bills, duplicate charges should be easier for patients to spot.

6. Undercoding

Undercoding is the act of billing for a service that is less expensive than the treatment performed or leaving out codes altogether. Providers may undercode to minimize patients’ costs or to avoid audits. Unlike many of the other billing errors, this error negatively affects the provider rather than the patient. Undercoding can have legal repercussions, so strict measures should be in place to avoid this billing error.

7. Upcoding

Upcoding is the act of billing for a service that is more expensive than what was received. This occurs when a billing code is incorrectly changed to one representing a more severe treatment or diagnosis. Upcoding is illegal and can inflate a medical bill. Common upcoding examples can include coding inpatient care for what was really a regular office visit or coding a name-brand medication when a generic brand was used.

8. Unbundling

Unbundling is the act of billing for individual services covered under a less expensive packaged treatment plan, meaning charges that would typically fall under one code are instead listed separately. Unbundling can cause a bill to be higher than the package rate.

9. Incorrect or Mismatched Codes

Insurance companies will usually reject claims with mismatched treatment and diagnosis codes. This can occur when a biller upcodes a patient’s diagnosis without changing their treatment code. Mismatched codes can also cause the claim to be inflated due to upcoding.

Incorrect coding could also result in an insurance company denying a claim due to lack of medical necessity. When providers don’t provide coders with enough information about the patient’s diagnosis, the wrong code could be placed on the bill. If the insurance company believes the health care service wasn’t necessary, they will deny the claim.

10. Canceled Procedures

Patients may also accidentally be charged with procedures or tests that were canceled. When a patient is overbilled, they may collect their documents to prove the error and dispute the charge.

Before submitting any medical bills, check and re-check them multiple times to be sure errors haven’t been made.Poor billing practices can cost physicians in the U.S. billions of dollars. Small mistakes can result in insurance companies rejecting claims, which means those claims need to be corrected and resubmitted. Because this tends to be such a long process, several months can pass before payment is received for the service. Frequent billing errors can also trigger audits and investigations, which can damage both a practice’s reputation and finances.

By outsourcing your billing to companies with decades of experience in the industry, you can avoid billing errors and retain more of your revenue.

Solutions for Common Medical Billing Errors

Unfortunately, creative billing can lead to many problems — even jail time! Undercoding, upcoding and unbundling are all considered fraud.

Avoid these risks by hiring a professional medical billing service to help handle your claims paperwork. Not only will you avoid errors — and with them everything from disruptions in processing to the threat of large fines — but you can also streamline your staff toward other tasks, saving money and reducing workforce stress.

Some practices may choose to hire in-house medical billing staff while others may choose to outsource to a billing company.

In-House Medical Billing

Some practices may find that handling medical billing in-house is the most cost-effective solution.

1. Issues Are Handled Immediately

When the billing staff works in the same office mere feet away, billing issues that arise can be handled immediately. Physicians won’t have to wait on getting in contact with a company, an investigation or a response. In-house medical practice billing may seem like the smoother, faster option.

2. Direct Communication Exists Between Physicians and Billing Staff

Similarly, if the in-house billing staff has a question about a physician’s notes, about medical coding or about patient information, they can quickly access the medical staff who can answer their questions. This direct line of communication can help the billing staff in getting their work done more efficiently.

3. Productivity Levels Among In-House Staff Are Easier to Control

While an outsourced company’s employees have their own procedures and regulations to follow and bosses and managers to listen to, your employees work directly for your office. If they aren’t working productively or efficiently enough, you can make adjustments as needed to increase their productivity levels.

4. Staff Are Trained to Your Specifications

By hiring in-house staff to handle billing, all training will occur within your company and be designed to meet your training specifications.Here are some best practices to help your staff avoid common billing errors:

  • Double-check patients’ personal information:One of the easiest ways for support staff to help prevent mental health billing errors is to verify information during patient intake. This means double-checking the spelling of a patient’s name, birthdate, address and Social Security number. Clerical errors can be avoided with just a little extra time and attention.
  • Double-check patients’ insurance information:Your staff should also call a patient’s insurance company before treatment is rendered to ensure their policy number and coverage are the same, and that you have updated billing contact information.
  • Establish a policy for compiling bill information: Another clinic policy that will help you keep bills under control is to determine who, how and when bill information is compiled. If a provider, support staff and your clerical team are changing documents, it won’t be long before you’re charging patients for the same treatment twice. Make sure one person is in charge of compiling the final billing notes so double-charges and mismatched diagnoses are cleared up.
  • Remember to follow up on your claims: You can avoid errors when you follow up on claims with insurance companies. Representatives working on a claim may be able to inform you when they find an error, and you can correct and resubmit the claim before it’s denied.
  • Establish clear communication and coordination within the office: Be sure everyone who works on a claim is coordinating with the team. Physicians administering care and staff collecting patient information should be able to help you work out any issues that may arise in the billing process.
  • Stay up-to-date on billing codes:You also need to invest in constant training for your staff to be up-to-date with the latest insurance codes. Skipping this step is bound to cause problems. Chances are, you can’t afford them.

Instead of jumping ship and joining a large hospital or medical group staff, consider the affordable options available to private practices.

Outsourcing Medical Billing

Outsourcing your medical billing management may be the most beneficial solution over the long-term.

1. Employing In-House Staff Can Be Expensive

Employing staff specifically for billing can become quite expensive. With employees come the costs of training, salary, taxes and benefits. By outsourcing, you eliminate the costs of employing staff and the time necessary to train staff in software, coding and procedures. Medical billing specialists already have the training and expertise to do the job well, and they will only make money when you make money.

2. Outsourcing Can Save Your Employees Time

By outsourcing to a billing service, you can ensure your company’s nurses and physicians will no longer need to spend their time on billing concerns. Staff members can use this freed-up time to focus on their specific job duties and care for their patients.

3. Billing Companies Charge Based On a Percentage of Revenue

Many billing companies charge a percentage of the revenue they bring in for their clients. This gives billing services motivation to be diligent in resubmitting claims and getting your money to you as quickly as possible. Rather than overstretching your current employees, you can outsource to a billing company that will be dedicated to taking care of claims as efficiently as possible.

4. Billing Companies Offer Expertise and Resources

Medical billing companies have more expertise in the field, and they have the necessary resources to do their job effectively. Billing services that are compliant with current laws in health care can provide peace of mind to your practice. You can trust that the law will be followed when you work with a respectable, certified company.

Outside services can also provide your company with the proper software and practices, and they may be able to provide additional services, such as patient follow-up, coding, appointment reminders, data reporting, consulting and more. Paying a lump sum to an outsourced billing service may be more cost-effective than handling all these responsibilities within your company.

The benefits of outsourcing your medical billing may sound expensive upfront, but by outsourcing, you could save your company more money, time and stress in the long-term than you would by performing your medical billing in-house.

Enlisting Professional Billing Error Help From BPS Billing

At BPS Billing, we keep our software updated on the latest changes so your profits aren’t tripped up by incorrect ICD, CPT, HPCS or Place of Service codes. We conform to insurance industry schedules as well, so you’ll never forfeit profits by missing deadlines again. These mistakes lead to rejected claims, which take time to correct and resubmit. Denials, on the other hand, take months and quite a bit of legwork to fix.

We have more than 20 years of experience in the industry, and our clients experience a success rate of more than 95% for submitted claims. Get ahead of billing issues before they take a bite out of your budget. Contact BPS Billing today at (833) 277-2455 and request a quote on specialized mental health billing software and complementary services.