6 Common Medical Billing Mistakes

6 Common Medical Billing Mistakes

There are many medical billing mistakes that lead to claim denials. For some offices, a duplicate bill occurs from human error. These duplicates may also result from resubmitting a claim rather than a follow-up or canceling a procedure but not deleting it from the patient account. Additionally, tests are ordered but the patient leaves before they are done. Sometimes the biller does not know that this has occurred and processes the claim as if the test was done.

1. Duplicate Claims

The medical claims processing system should have criteria to evaluate all claims received for the incidence of duplication. These claims are placed into two categories: suspected duplicate and exact duplicate. Some claims can only appear as duplicates because of the nature of the services. However, proper coding of the service with the correct disorder/condition codes and/or modifiers will determine the claim as a separate payable service rathBest Medical Billing Companyer than a duplicate. Claims that are exact duplicates will contain:

  • Provider number
  • HIC number
  • From date of service
  • Through date of service
  • Type of service
  • Procedure code
  • Place of service
  • Billed amount

2. Up-Coding

Up-coding means that there is a higher-paying code intentionally used on a claim to receive a higher reimbursement, or billing a covered Medicare service instead of a non-covered one. With up-coding, a provider uses CPT codes to bill the health insurance payer, whether it be Medicare, Medicaid, or a private payer. This billing is done for provision of a higher-paying service than the one actually done. Up-coding is illegal and considered fraudulent practice.

3. Unbundling

Unbundling, on the other hand, is when bills are submitted in piecemeal for the purpose of receipt of maximum reimbursement for procedures, tests, or other things required to be billed medical billing serviceat one time together. Also known as fragmentation, unbundling is a way some providers increase profits. The medical biller will “unbundle” the procedures and/or tests and bill separately for each element of the grouping. This separation of components results in special reimbursement rates, which is not acceptable or legal.

Medicare reimburses certain surgeries based on a package of care, which is called a global surgical package. Any unbundling for additional payments is not acceptable. Therefore, medical billers should understand the usage of modifiers for improper coding. Surgery codes are found in the Centers for Medicare and Medicaid Services (CMS) Physician Fee Schedule Database (MPFSDB) with 0, 10, or 90 global days.

4. Medical Necessity

When further documentation is requested for supporting medical necessity, a payer may ask for medical records to adjudicate a claim. This includes the patient’s history and physical reports, consultation reports, discharge summaries, operative reports, and/or radiology reports. Medical necessity is recognized by both Medicare and private payers as a deciding factor for claims processing and payment. While each payer often has its own definition, the outcome is the same. The most efficient way to adhere to medical necessity is to consider each component of the history and physical as a separate procedure done only when there is a specific medical reason for this. The main thing to remember is that the documentation must support the level of service.

5. Prior Authorization and Referrals

The section 1862(a)(1)(A) of the Social Security Act specifies that Medicare will not reimburse for services that “are not reasonable and necessary for the diagnosis or treatment of illness or injury or to improve the functioning of a malformed body member.” Therefore, a prior Top Medical Billing Companiesauthorization and/or referral is required. Also, some payers request authorization from another physician before certain services or tests/procedures are performed.

The medical biller should understand the difference between a referral and a prior authorization. The primary care physician sends the patient to a specialist or another provider for the purpose of testing and treatment. Therefore, a referral must be issued. Obtaining prior authorization is only a guarantee of payment when it is supported by medical necessity, filed within the time specifications, and filed by the provider who made the referral.

6. Services not Covered or Terminated Coverage

Insurance information is subject to change, so the medical billers must verify eligibility when services are provided. It is crucial to verify that coverage has not been terminated, that services to be provided will be covered under the current plan, and that maximum benefits have not been surpassed, for things such as behavioral health and therapy. Understanding the patient’s insurance plan will allow the provider to offer services that will not result in denied payments. Also, when providing special services, be sure to use proper modifiers.


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