By Scott Speranza, HealthLock
In our intricate healthcare system, where every detail matters, precision is paramount. Even so, the U.S. healthcare industry continues to grapple with a persistent challenge: medical billing errors. These discrepancies are abundant in virtually every facet of the system, whether due to human mistakes or technology snafus. This carries profound implications for both healthcare providers and their patients, making it more critical than ever to prevent them from occurring in the first place.
Most common medical billing errors
When it comes down to it, staying vigilant to the tells of common medical billing errors can ensure providers catch and correct them quicker. Here are a few of the biggest mistakes to look out for:
- Out-of-network vs. in-network
In-network and out-of-network billing is rarely black and white, and because of this, it persists as a hotly debated billing issue today. It’s been so troublesome to parse that, almost three years ago, Congress passed the No Surprises Act, which increased patient protections when it comes to out-of-network surprise billing. This encompasses out-of-network care from a provider or hospital during an emergency or when a patient seeks non-emergency care at an in-network facility, requiring that patients be billed at in-network rates in either of these cases.
- Unbundling & upcoding
Another perplexing scenario arises with unbundling. This occurs when two services rendered at the same time are coded separately rather than as one service – for example, separating the two mammograms a patient received during the same preventative visit as different services, or billing separately for incisions and closures from the same patient surgery.
In the case of upcoding, a patient is billed for a higher level of care or service than was actually provided, ultimately inflating healthcare costs for payers. Upcoding tends to crop up when a patient seeks emergency or diagnostic care – for example, a patient gets a simple X-ray, and a medical biller mistakenly codes it as a complex X-ray, instead.
Both unbundling and upcoding are considered fraudulent, and mistakes aligned with either should be avoided at all costs.
- Lack of preauthorization
Another common pitfall in the healthcare billing process stems from the lack of preauthorization for certain medical procedures. Many healthcare plans require prior authorization for surgeries, CT scans, various imaging services and even specific types of diagnostics, such as advanced 3D mammograms.
Often, this error occurs when healthcare plans utilize third-party administrators, creating a disconnect in communication between providers, insurance companies and administrators. To mitigate this, seamless communication among all parties involved is crucial and ensures the green light for preauthorization is unequivocally acknowledged by each stakeholder.
Beyond the bottom line: How medical billing errors harm providers
These billing errors, far from being mere inconveniences, carry tangible and far-reaching consequences not just for patients’ wallets, but also for healthcare providers. Some of these ramifications include:
- Delayed payments
One of the most immediate and tangible effects of billing errors is payment delays. When claims encounter complications or errors, they are more likely to be subject to prolonged scrutiny and processing times. Delayed payments can lead to increased operational costs, create uncertainties in financial planning and yield poor Revenue Cycle Management (RCM).
- Increased administrative costs
Rectifying billing errors is an inherently resource-intensive task. Healthcare providers are compelled to allocate considerable time and staff resources to address these issues – and it’s not insignificant. According to the Journal of the American Medical Association (JAMA), multiple studies over the last 20 years have found administrative expenses account for about 15-25% of total national healthcare expenditures, translating into between $600 billion and $1 trillion annually.
- Regulatory & legal consequences
Billing errors can have profound legal ramifications, including penalties, audits and damage to a provider’s reputation. Regulatory agencies closely scrutinize healthcare billing practices, and providers found in violation of billing regulations may face significant fines. Furthermore, legal battles arising from billing errors can result in protracted, expensive and reputation-shattering disputes.
Tech, training & transparency yield more accurate medical billing
Billing errors don’t just hit providers’ bottom lines and patients’ pocketbooks. Their impact can also be felt by the entire healthcare system, contributing to the rapid inflation of medical costs.
Technology is at the forefront of efforts to reduce billing errors. Electronic health records (EHRs), artificial intelligence (AI) and automation are being leveraged to streamline billing processes and minimize human error. EHRs, in particular, facilitate accurate and seamless documentation, reducing the likelihood of coding and documentation errors. AI-driven algorithms, combined with human analysis and expertise, can detect inconsistencies and anomalies in billing data, allowing for timely intervention and correction.
Beyond investing in technological advancements, providers can stay at the top of their medical billing game by training staff, keeping up on the latest coding requirements and educating patients about the importance of providing accurate information and keeping their insurance policies up to date. Maintaining strong communication standards among provider staff, insurance companies and third-party administrators can also create a more accurate and efficient billing system.
Ultimately, healthcare providers must prioritize billing accuracy as an essential component of their practice – it’s not just good business, it’s their responsibility to ensure patients receive the highest quality of care without unnecessary financial burdens. With the right balance of technology, training and transparency, providers can transform the healthcare billing landscape for the benefit of all stakeholders and usher in an era of precision and efficiency in healthcare billing.
Scott Speranza is the CEO of HealthLock – a digital solution that monitors members’ healthcare claims and notifies them of red flags putting their medical identity and finances at risk. HealthLock is a disrupter in healthcare billing and fraud protection, forging partnerships with financial institutions, employer groups and benefits providers to offer health data privacy solutions. Ultimately, Scott is passionate about making healthcare simpler and more effortless for all. Reach him at ssperanza@healthlock.com. More at healthlock.com.