Beefy medical billing from brief hospital stays, even in emergencies, are a common and unfair scenario these days. As per the HHS (United States Department of Health and Human Services) press release, millions of Americans face surprise medical billing. 

More so, inflated billing charges are imposed on patients against unoffered services. For example, a patient visited a general physician, but the administrator happened to enter an inaccurate diagnostic code of a detailed X-ray. Also, a-few providers have been criticized for fraudulent upcoding i.e, hoarding sky-rocketing service payments. We would be explaining upcoding later in this blog as well for better understanding.

Regardless if these inaccuracies are a result of intentional system abuse or human errors, it ends up costing everybody including healthcare practice and insurance companies. To say goodbye to such billing confusion and make sufficient adjustments, let’s take a closer look at some most common medical billing mistakes before discussing their smart solutions.

medical billing

Common Medical Billing Problems

As per CFPB (Consumer Financial Protection Bureau), about 58% of Americans are stuck in a medical debt puddle in 2022. And billing and coding errors are accused of precipitating such burdens besides other factors. Not just that, inaccurate coding also subscribes your medical practice to partially paid, lingered, or denied reimbursements resulting in lost revenue, anxiety, and accumulated paperwork.

Below is a detail of some most common healthcare billing challenges causing barriers to care:

1. Coding Sequence Errors

The Healthcare sector is complex in many terms, especially in its protocols and codes. With about 70,000 ICD-10 codes, there is a high chance of replacing one number with another thus completely altering the coding sequence. As a result, the medical client may be billed invalidly. Improper coding may be due to several reasons:

Paying heed to accurate diagnosis codes can minimize such missteps. Many organizations are also looking into medical billing software development to assist their staff in using proper codes.

2. Missing Claim Fields

In case the fields of the onset date, procedure date, medical emergency date, etc. are missing in a claim, the insurance provider will directly deny the claim. Insurance companies follow a professional procedure and require proper documentation with complete claim fields to process it further. That being the case, in order to avoid claim editions and resubmissions, ensure the entirety of the claim’s info before submitting.

3. Erroneous Patient Identifier Details

The healthcare staff is occupied with thousands of things on an everyday basis. One of its reasons is that the medical sector isn’t a one-man show, it requires teamwork and collaboration. A biller may input a wrong detail of a patient (may be due to a minor distraction) e.g. misspelling a patient’s name or editing his/ her date of birth. This minor slip can also lead to claim denials thus prolonging the clearing procedures and affecting revenue flows.

Patient Identifier Details

4. Claims are Filed Late

Timely filing means that the medical company is bound to file the claims within a predefined time limit with the insurance carriers. The time frame differs from payer to payer and even from plan to plan (in some cases). E.g. The patient paid a visit to a facility on October 1st. The facility has an insurance company with a timely filing limit of 60 days. After 90 days, claims will be considered to be filed late and the patient would be responsible for payment.

5. Duplicate Claims

You must remember that double bills are equal to annoyed patients. In some instances, two same bills may be prepared unknowingly. Myriad billing solutions have features to ditch these manual spreadsheet issues and highlight such duplications.

6. Treatment and Diagnosis Codes are at Odds

Healthcare services are recorded as treatment/ procedure codes while the medical condition of the patient is recorded as diagnosis codes. Both of these codes must make sense together in claim submission to avoid claim denials. Put into words, your patient can’t be treated for an eye infection if he/ she is diagnosed with an ear infection.

7. Unverified Patient Coverage

It is better to recheck a patient’s insurance (in-network and out-of-network) coverage at every visit to ensure that his treatment and visits are covered. In-network coverage is an agreement between a doctor and insurance company regarding predetermined costs of services. Out-of-network coverage means that a certain provider or physician has no contract with your health insurance provider. This results in swollen bills and costly delays.

Unverified Patient Coverage

8. Downcoding and Upcoding

Upcoding, a medical billing problem, can pose fraudulent billing charges on a Medicare organization. Upcoding happens when staff reports expensive services which don’t support the medical diagnosis to make cosmic money. If accused, such a practice would have to come across audits due to non-compliance.

Downcoding, on the other hand, happens when the claim documents lack specific details regarding treatments and diagnosis. Also called undercoding, it has two possible agendas. One is to save clients money while the second one is to minimize the probability of audits and claim denials.

9. Unbundling – Another Source of Common Medical Billing Mistakes

Intending to recover great reimbursements, unbundling fraud is a form of upcoding explained above. Medical providers charge a group of services individually even if the codes of multi-step procedures are present (and they can bill as one coded procedure). This healthcare fraud encourages unnecessary healthcare billing and should be avoided for smooth revenue cycles.

10. Poor Software Implementation

Here are two points worth your attention! First, prior to installing a software solution, the project team should strategically plan and choose a system as per the present and potential needs. This would prevent you from installing a totally new technology if a distinct need comes over. 

Second, the organizational members should be well-versed with the implemented software. Because confusion and poor participation would waste this precious modern healthcare investment.

Hacks to Solve These Medical Billing Problems

Medical billing errors cost patients up to $88 billion yearly and push them to pay more than they owe. Uncollectible claim denials cost $3.5 million loss to healthcare practice. Now that we know the causes, let’s explore some tips that help healthcare providers optimize medical billing:

1. Confirm Patient Information

Claim denials equal unresolved claims worrying patients if they would have to bear its price. It also hurts the hospital’s finances and revenues. To minimize the likelihood of suffering billions of dollars with health insurers, ensure proper submission of the patient’s name, social security number, accurate insurance information, address, etc.

2. Train Staff Members

ICD-10 codes may seem complex and detailed. It’s always good to arrange training sessions to avoid coding and medical billing problems. Staff must also have hands-on experience with documentation software. The healthcare sector frequently experiences updates so you better ensure that all organizational members are familiar with the right and latest information!

Apart from training, they must not be afraid to inquire if confused instead of using inaccurate codes and making medical reporting blunders.

Training of staff members

3. Consider a Medical Billing Software

You can purchase or develop a custom medical billing solution to avoid these medical billing problems. They offer reporting tools, ongoing support, automated claims management, payment reminders, and many more. You can pick and pay only for features you require. 

Some billing software also enables centralized patient information allowing access to patients thus revamping their satisfaction. Kareo, WRS Health, NueMD, and CareCloud are some of such well-reputed medical billing software available.

Your facility can outsource RCM services like:

This outsourcing can reduce admin tasks of the staff while boosting operational efficiencies thus shrinking the problems with medical billing and coding.

4. File Claims Timely

Insurers may set a deadline for claim submissions. To prevent them from piling up closer to those deadlines, ensure that the claims are filed in time. Software solutions can set up reminders to prevent any hindrances.

5. Accurate Coding

Compliance bounds to follow correct coding initiatives. In addition, it ensures the best service reimbursements by omitting upcoding and downcoding. Contrarily, coding errors in hospitals may cause appeal denials costing up to $181 per claim.


6. Submission of Clean Claims

Being in the industry, you do not doubt admitting that claim resubmissions are costly and time-taking. So, you alongside your team should confirm claim fields before passing them to the insurance companies.

7. Document Billing Disputes

Not all health insurance plans have the same deductible policy. There may arise some confusion regarding in-network and uncovered costs. Since these disputes affect future payments in addition to the past damages, it’s crucial to document each step and under-discussion topics. This record will provide useful insights and assist in the follow-up and appeal procedures.

8. Respond to Correspondence in Time!

To claim to proceed at your expected pace, it’s important to respond to any correspondence you receive from the insurer or the patient. This correspondence can dispense some essential information for denial management too.

9. Track Underpayments

Underpayment by payers can disrupt your efforts towards optimizing your collection procedures. Here technology can also help you to track underpayments and disputing a charge for maximized collections.

10. Appeal Internally

We can file an appeal with health insurers if billing disputes are in vain. Each insurance plan may have a varied appeal approach. You can contact the payer to discover the relevant appeal procedures and claim resubmission deadlines. Obey time limits and follow-up on processing.

health insurance claim form

11. Review Independently (if internal appeal came to nothing)

Go for an external appeal if the internal appeal process with the payer was unsatisfactory. Like internal appeal, you can contact the payer to determine appeal procedures and deadlines.

12. Preventive Denial Management

For maintaining healthy cash flows, choose denial prevention over denial management. Above stated practices can help you achieve preventive denial management and sustained cash flows.

13. Don’t Ignore Insurance Follow-Up Commitments

A/R follow-up is responsible to take care of denied claims. What’s fundamental is to work on claim renewals to manage collections for the hospitals and providers.

Wrapping up

Sustained revenue cycles are a lifeblood of medical practice. Hence, to prevent it from wounding, you need an optimized medical billing approach and you can realize the hacks in this article to accomplish upright cash flows and financial goals.