Medical billing mistakes aren’t just annoying paperwork errors; they’re money going down the drain, sometimes thousands of dollars each month, that practices will never see again. What makes it so frustrating is that the same types of mistakes happen over and over again, in an all-too-predictable fashion, and yet they still continue.
A claim goes out with the wrong code. Insurance denies it. The practice resubmits. Insurance asks for additional documentation. Weeks later, the practice follows up. By the time insurance makes payment, for which the practice hopes it will happen, the time spent by practice staff to chase down the reimbursement exceeds the value of the claim itself. Dozens of these transactions occur every week across the United States.
It’s not that medical practices don’t have billing mistakes; every medical practice has them. But the question arises as to why no one can seem to resolve the same types of problems over and over again and what some practices are doing differently that has changed this pattern for the better.
The Most Common Billing Errors That Cost Practices Money
Coding errors are first on the list, with various types. Someone has an out-dated code that insurance no longer accepts. Someone codes a service but uses a similar code that’s inappropriate. Someone has the correct code but it’s not paired with the correct diagnosis code, which leads to an automatic denial.
These are not necessarily errors made by people who just don’t care. Medical coding is an entire world with thousands of codes, ever-changing. If a biller learned about them six months ago, they might now be woefully behind without knowing; insurance companies change their rules regularly, and someone trying to manage a busy front office probably doesn’t have time to keep up strictly with coding.
Other denials related to patient information are missing or incorrect. A slip of the hand changes the last digit of an insurance ID; a patient moved and didn’t inform the practice on time; a policy expired, then was renewed under a different number. The information was correct at one time; something changed and was not caught in time. The claim goes out with the old information and insurance doesn’t pay.
Sometimes timing is an issue too; a service gets billed out after a filing due date; pre-authorization expires before a patient comes in; insurance kicks in but claims are processed before anyone confirms eligibility. Timing errors are primarily associated with practices falling behind on billing and claims sit idle until someone gets to them weeks later.
How In-House Billing Staff Have Problems with These Mistakes
Most medical practices have one or two people who do billing on a part-time basis while also doing front desk duties. They enter charges, appeal claims, post payments, answer patients’ questions about billing, and field calls from insurance companies. While they’re busy answering phones and checking patients in at the desk, billing gets pushed to next time. Next time turns into tomorrow; tomorrow turns into next week.
It’s not even the workload that creates such a challenge. It’s the interruptions. Someone attempts to solve a complicated denial that involves researching requirements and compiling additional information; a patient has an issue; their phone rings; their boss asks for something. By the time they focus again on that very denial, they’ve lost their train of thought. Details are missed; mistakes go through.
Training opportunities are another problem; when there’s one dedicated person for billing, what happens when that person is out sick or on vacation? Either billing is neglected until they get back or someone else swoops in without full knowledge of how things work. This is when mistakes become more frequent. Even when they get back into the swing of things, there’s a backlog, a situation that has compounded work by all accounts.
Many practices have found that bringing in outsourced billing help frees their staff from juggling multiple responsibilities at once, allowing everyone to focus on what they do best without compromising their positions.
Insurance Requires Change
Insurance companies are ever-changing, and providers must stay up to date on requirements based upon code submissions. Insurance companies alter their fees and line-item requirements and expect providers to know this information without assistance from their internal billers. A biller trying to keep track of everything at once without help cannot spend adequate time reading up on bulletins or attending trainings for change.
When recurring mistakes happen over and over again, this signals that there is some kind of issue from within. There isn’t a verification process that checks patient information prior to an appointment; there’s no scheduled time to evaluate fee schedules and code sets regularly; maybe there’s no formal process to determine what’s pending and follow up after time.
Inquiries taken from clinical reports vary and cause mistakes. The clinician notes one thing for documentation purposes, but because the biller interprets it somewhat differently, it creates an error in coding to submission. Without consistent communication between these departments, frustrations continue regarding billing errors.
Under-documentation contributes to continual denials that should’ve been avoided. The clinician knows what they did and how they did it; however, when it goes to paper without meeting insurance requirements, that claim gets rejected due to lack of necessity, not because it wasn’t necessary, but because it couldn’t be documented properly.
Technology contributes to mistakes as well, outdated practice management systems that don’t incorporate red flags for negatives that could’ve avoided outcomes before submission; lack of integrated systems between clinical and billing offices, forcing double data entry that could make mistakes; systems that don’t allow for real-time eligibility verification require staff to learn about changes after a denial.
How Practices Are Solving These Questions
Practices that have successfully reduced their billed errors didn’t simply become more mindful, but they changed their systems in specific ways.
First, they separated billing from front desk duties. Once billing became its own function, not something done between patients in a waiting room, billing reduction became effective because employees doing the claiming could focus instead of being interrupted constantly only to lose their attention ten minutes later without being able to find where they left off again.
They implemented some verification steps along the way, insurance needed to be verified before patients checked in; information needed to be double-checked at check-in once paperwork was completed; claims had to go through review before submission. Having multiple redundancy checks ensured that if something was missed along the way it could be caught early when it was easier to fix than waiting until it was too late became denials subjecting longer appeals.
Regular audits became standard practice, instead of avoiding accountability until insurance denied a claim, practices started pulling sample claims weekly or monthly themselves to look for commonalities and assess problems so they’d be easier to resolved instead of left to fester down the line.
Communication increased between clinical teams and those responsible for billing, and not just relations who were misinformed about what paperwork was created which would need additional steps in the future, but billers asking questions for documentation purposes while providers understood what components were necessary for billing concerns. Less guesswork means less interpretation for coding errors.
Technology increased value, but not for all practices expected. The practices that saw the biggest improvements didn’t invest in the most expensive systems, but instead relied upon systems with which they integrated best with functionality most appropriate they needed, be it better verification of eligibility, automated coding opportunities, or clearer tracking of denial-related approval payables.
The Financial Impact of Getting It Right
When practices work towards reducing billed error percentages through practice increment boosts, financially they see results almost immediately, as do their accountants, and it’s typically this way: less denials faster equate payments sooner instead of avoiding resubmission costs.
Staff costs decrease when appeal costs increase at larger affiliations. Cash flow potential demands consideration so practices can stop worrying about whether payroll will clear this week because it’s become increasingly common when 5 to 10% of potential revenue applies lost per practice annually through billing error percentages. For those who receive $1 million dollars annually through practices, that’s about $100,000 equity down the drain at $50 to $75 per claim effort through hours worked, not even the value of one additional patient visit requested.
But not only are cash flow improvements seen, stress reduction follows suit as staff no longer need to play middle ground against upset patients frustrated none of their claims were processed. Clinicians can find focus without narratives complicating issues, and patients can be happy when positive results occur rather than misdirection for frustration down the line.
Moving Forward With Better Systems
The answer isn’t finding perfect people who make no mistakes who process everything correctly with no oversight or encouragement or involvement from others generating new ideas. Instead, it’s providing systems so that mistakes are less likely from the get-go, and when mistakes do occur, they’re easier to catch along the way.
Finding practices where billed error percentages are significantly lower rely on common themes, namely that practices treat these efforts as serious business endeavors requiring resources and good ideas dedicated towards them instead of thinking saving money by under-staffing makes sense when efforts are more financially viable compared to strong merit requirements. Practices willing to invest in better systems realize that reducing billing errors effectively happens once proper systems are in place, allowing people the space and time to do appropriate work from start to finish instead of relying on temporary fixes that create ongoing problems for everyone involved.
