Chethan Sarabu, MD
Oct 17, 2024
When you receive a medical bill, it can feel like you’re reading a foreign language. The codes listed on your bill are part of the process by which medical procedures and diagnoses are translated into claims that your insurance company can process. But, while medical coding may seem like a science, it’s often more of an art, with room for human error.
Healthcare providers follow general rules and guidelines when adding codes, but the process isn’t foolproof. Typically, the clinician who sees you will input the initial codes, but in most healthcare systems, specialized medical billers (or “coders”) will review and sometimes correct or modify these codes. Unfortunately, errors still happen.
Some of these errors are simple clerical mistakes, understandable given the complexity of healthcare information. But other errors occur when the codes entered don’t quite match what actually happened during your care. Sometimes, more complicated rules require that individual procedures be bundled together under a single code, and when that’s missed, you could be billed for each procedure separately — and unfairly.
Let’s walk through the most common coding errors that can affect your bill. Knowing what to look for can save you from paying too much.
1. Coding Errors
Coding errors are one of the most frequent mistakes found in medical bills. These occur when the wrong CPT (Current Procedural Terminology) codes are used to describe a service or procedure. Even small coding errors can result in overcharges or billing for services that weren’t provided.
Example: A routine office visit being billed as a more expensive consultation.
Why It Happens: Data entry mistakes or lack of familiarity with proper coding practices.
2. Duplicate Billing Errors
Duplicate billing happens when the same service or procedure is billed more than once. This can lead to patients paying double for the same treatment.
Example: A patient receiving two bills for the same X-ray.
Why It Happens: System errors, delays in processing, or simple human mistakes during billing.
3. Lack of Medical Necessity Errors
This error occurs when a provider submits a claim for a service that the insurance company determines wasn’t medically necessary, often leading to a denied claim.
Example: Billing for a diagnostic test that wasn’t justified by the patient’s diagnosis.
Why It Happens: Using incorrect diagnosis codes or not meeting the insurance company’s medical necessity criteria.
4. Unbundling Errors
Unbundling occurs when procedures that should be billed together are separated into individual charges, leading to inflated bills.
Example: A lab billing individual tests that are supposed to be bundled into a single charge.
Why It Happens: Providers may unbundle services to increase reimbursement from insurers.
5. Upcoding Errors
Upcoding is when a provider bills for a more expensive service or procedure than what was actually performed. This can lead to higher patient costs.
Example: Coding a basic follow-up visit as an advanced consultation.
Why It Happens: In some cases, upcoding can be an intentional effort to increase revenue.
6. Incorrect Patient Information
Errors in basic patient information can cause claim rejections or delays. Something as simple as a misspelled name or incorrect birthdate can result in claim denials.
Example: A bill sent to insurance with an incorrect patient ID number.
Why It Happens: Human error during data entry.
7. Missing or Incorrect Prior Authorization
Prior authorization is often required before certain services or procedures are performed. If authorization is missing or incorrect, the claim may be denied.
Example: A patient undergoes a procedure without the necessary insurance authorization, leading to claim rejection.
Why It Happens: The provider may fail to obtain or verify prior authorization before delivering the service.
8. Invalid or Outdated Codes
Medical billing codes are updated regularly, and using old or invalid codes can cause claims to be denied or delayed.
Example: A provider using a code that has been phased out, causing the insurance to reject the claim.
Why It Happens: Outdated billing software or failure to keep up with coding updates.
9. Incorrect Facility Fees
Some providers charge facility fees that shouldn’t apply, especially if a service didn’t require the use of hospital facilities.
Example: A patient receiving a facility fee charge for a virtual or telehealth visit.
Why It Happens: Miscommunication about where the service was delivered or incorrect billing policies.
10. Misapplied Insurance Adjustments
Insurance adjustments are reductions in the amount a provider is allowed to charge. Misapplying these adjustments can lead to patients being billed for incorrect amounts.
Example: A patient’s bill doesn’t reflect the negotiated insurance discount.
Why It Happens: Billing systems fail to apply the correct insurance adjustments or discounts.
All of these common coding errors can lead to inflated bills or denied claims, and the responsibility often falls on the patient to catch them. Stay vigilant, review your bills closely, and don’t hesitate to question anything that seems off — it might just save you money.