Proven Ways to Avoid the Most Common Medical Billing Errors

Medical billing is a detail-oriented profession. People who are not meticulous about details are ill-equipped to work as medical billers. Accuracy is the most important part of medical bill preparation.

Getting billings right helps medical practices get paid on time. Errors cause billings to be rejected. Fixing mistakes takes time and delays payments. Too many errors can raise a suspicion of fraud or create a reputation for incompetence.

Here are the most common errors that medical billing experts see in medical billings. We also share our thoughts about how those errors can be prevented.

Billing one patient for services delivered to a different patient is a surprisingly common mistake. The error can be caused by the confusion of similar names or similar patient identification numbers.

Double checking is part of the meticulous nature that billing professionals should cultivate. Making sure the patient’s name and identification number in the medical records matches the name and number of the patient who is billed will save the biller from preparing a new bill when an insurer or patient complains about being billed for services that were never provided.

Mistyping a patient’s identification number, date of birth, or CPT codes will frequently cause an insurer to reject a bill. While it may be possible to correct the error and to resubmit the bill, getting it right the first time depends on proofreading every detail of the billing before it is finalized.

Patients may have multiple insurers. Determining whether a billing should go to the patient’s primary health insurer, to a workers’ compensation insurer, or to an auto accident liability insurer is one of the biller’s first tasks. Submitting a bill to a former insurer after insurance coverage has changed will also cause a billing to be rejected. Spending a few minutes verifying the insurance company that should receive the billing will avoid payment delays.

Medical billers are trained to understand Current Procedural Terminology (CPT) codes. Selecting the correct CPT code is one of a biller’s most important — and most difficult — tasks. 

Describing medical services and procedures in words creates room for ambiguity. The same service might be described in different ways, while different services might be described in similar ways. Five-digit CPT codes provide a standardized way of describing each procedure or service that a health care provider might render, making it possible for an insurer to understand what services or procedures are being billed without risking a misinterpretation of written descriptions.

The Centers for Medicare & Medicaid Services, which oversees the Medicare and Medicaid programs, incorporated CPT codes into its own system, the Healthcare Common Procedure Coding System (HCPCS). Billings to Medicare or Medicaid may be rejected when a biller errs in assigning a CPT code. When the bill is paid but the error is discovered during a billing audit, the provider may be required to refund fees that the government paid to the provider.

The American Medical Association (AMA) first developed CPT codes in 1966. The AMA has revised and expanded the coding system on several occasions. The codes are changed and updated regularly. New codes are added as the medical profession adopts new procedures and technologies. Keeping abreast of changes is the key to avoiding mistakes in assigning a CPT code. 

While each medical procedure has a unique CPT code, there are times when multiple procedures are performed at the same time. Rather than billing each procedure separately (a mistake known as “unbundling”), billers must determine whether a CPT code has been assigned to a group of services provided at the same time. If so, the biller should use that code rather than billing each procedure separately.

Unbundling may result in more revenue for the provider, but the reality is that multiple procedures performed during the same visit often take less time than multiple procedures performed during multiple visits. Using the correct CPT code to avoid unbundling assures that patients are not overbilled. 

When a group of procedures takes longer than usual to perform, billers should use code modifiers to indicate the extended time rather than unbundling the charges. Learning how to use code modifiers, like learning how to use CPT codes, requires continuing education and training throughout a medical biller’s professional career. Staying current is essential to the avoidance of billing errors.

In addition to CPT codes, medical billers must use and understand diagnostic codes. A diagnostic code, based on the International Classification of Diseases (ICD), is assigned to each diagnosis of a disease or health condition that is documented in medical records.

Assigning the correct diagnostic code helps insurers understand why treatment was provided. An incorrect diagnostic code may create a disconnect between the billed procedure (as described by a CPT code) and the diagnosis. When a CPT code does not describe a procedure or service that would be a reasonable treatment for the diagnosed condition, the insurer will reject the bill. Payment will be delayed until the erroneous diagnostic code is corrected.

Errors in linking diagnostic codes and CPT codes are avoided by mastering both sets of codes. In addition, double checking every assigned code before the bill is submitted for payment will catch errors that could result in the bill being rejected.

Billing twice for the same service or procedure is an obvious error. The error may result in overpayment of billings. When insurers catch the error in an audit, the medical practice will need to refund the extra payment. Medical practices may face liability if Medicare or an insurer suspects that the overbilling was deliberate.

Duplicate billing usually occurs because different people who handle billing for a provider input billing information for the same patient at different times. Assigning one biller to do all billing for the same patient is a way to eliminate errors. Alternatively, billers should review all previous billing entries to determine whether the same procedure or service has already been billed.