Common Medical Billing and Coding Mistakes and How to Avoid Them

By Karen Smiley from Medical Billing and Coding For Dummies

Providers, payers, and patients rely on medical billers and coders to do their jobs accurately and without mistakes. Luckily, that’s pretty easy to do once you’ve had the right training. It also helps to be armed with the most common mistakes so you can be especially vigilant at avoiding them.

Incorrect medical code unbundling

Codes that are bundled are considered incidental to another billable procedure. For example, a surgeon must make an incision before a surgery can be performed. The incision is incidental, and the surgeon must then close the incision. Again, a normal closure is incidental because it is necessary to complete the primary procedure. The physician usually fully documents the approach (the incision) and the closure, but that doesn’t mean that you should bill for them.

Similarly, a procedure that is a result of the surgeon “being in the area anyway” is not necessarily billable. The key is to know which procedures are bundled and which ones aren’t. You can find this information by checking NCCI edits. If the procedures are considered incidental, they will be included in the bundling edits.

Ignore a coding or billing error

Occasionally the documentation has an error. Perhaps it’s a transcription error or an omission by the provider. Either way, as the biller/coder, you’re responsible for bringing the error to the attention of the physician and making sure that it is corrected.

Sometimes resolving the error is as simple as correcting a patient name or a spelling error. Other times, the error may be in the coding.

In all cases, after you find and correct the error, you must submit the corrected claim. Failure to do so can result in the provider receiving an undeserved payment or being underpaid. Find the problem and follow up on it immediately to avoid bigger problems later.

Mishandle an overpayment

Occasionally, a payer fails to process a claim correctly, either paying too much or too little. If a claim has been underpaid, the provider is quick to ask that the error be rectified. When a claim has been overpaid, the same policy should be implemented.

If a payer has failed to follow the contract and allowed more than the contract obligates, the provider should notify the payer and prepare to return the erroneous payment. Doing so reinforces your integrity with the payer and also averts potential interest payments that may be obligated when the payer finds the error and asks for reimbursement.

Fail to protect patients from out-of-network penalties

Most patients are not experts on insurance plans or the medical claim processes. If a provider is out-of-network, the patient usually faces penalties in the form of high deductibles or higher co-insurance liability. Some plans don’t cover out-of-network services at all.

To protect patients from this scenario, providers should have office policies that define how out-of-network patients are to be billed. In addition, and whenever possible, you should verify patient benefits prior to any encounter and explain to the patient the provider’s expectations regarding to copayments, deductibles, and co-insurance responsibilities.

Fail to verify prior authorization

Before they can be performed, some procedures require that the provider receive prior authorization, which is permission from the payer for the patient to be treated. Failure to obtain necessary authorizations or referrals may result in the claim being denied. Depending upon the provisions of the patient’s plan, liability for billed charges then fall on either the provider or the patient.

For this reason, checking whether planned procedures need prior authorization is a vital part of ensuring that the provider adheres to the contract he has with a payer and receives the negotiated reimbursement for the service provided.

Always ask the physician to note any and all procedures that may be performed and check for authorization requirements for each one. Obtaining an authorization that is not needed is better than finding out after the claim is submitted that one was required.