Six common medical billing and coding errors and how your medical practice can avoid them
Medical coding and billing errors can easily put a damper on revenue cycle management and medical practice profits. When practices don’t submit the correct codes and follow payer requirements, healthcare claim denials can easily spiral out of control, causing cashflow problems and challenges with revenue integrity.
Unfortunately, healthcare claim denials have increased by 17% on average due to lack of resources to support appeals and denial management, revenue cycle staffing shortages, inadequate training on denial prevention, substandard technology to analyze denials, and more. Not all denials are due to medical coding and billing errors; however, many of them are. This article addresses the top six errors and how to avoid them.
1. Invalid medical codes. New and revised diagnosis codes take effect every April 1st and October 1st while CPT procedure code updates take effect January 1. What are some common medical coding changes? Some medical codes simply become retired. Others might change from a single nonspecific medical code to several specific ones, or two medical codes might become a single combination code. Staying on top of these changes—particularly the ones that pertain to your medical specialty or subspecialty—is a relatively easy way to prevent avoidable healthcare claim denials.
2. Incorrect medical code application. Avoiding healthcare claim denials isn’t only about reporting the right medical codes—it’s about reporting them in the right way. Official medical coding guidelines dictate when and how to report medical codes. This includes guidelines for ICD-10-CM diagnosis codes as well as CPT procedure codes. It also includes payer-specific guidelines. To avoid healthcare claim denials, be sure to monitor payer websites and download and disseminate copies of the most up-to-date coding guidelines.
3. Incorrect CPT modifiers. Payers often have specific requirements for when and how to append CPT modifiers—especially the most common ones (i.e., -24 for an unrelated evaluation and management [E/M] service during a postoperative period, -25 for significant and separately identifiable service, -26 for professional component, and -59 for distinct procedural service). For example, Cigna recently said it would prescreen claims with modifier -25 and require additional documentation prior to payment but then announced a delay stating it would ‘continue to review for future implementation.’ Understanding medical billing documentation requirements for each CPT modifier—and monitoring payer websites for updates—is critical.
4. Unspecified diagnosis codes. Payers are really starting to crack down on unspecified codes, sometimes even downcoding E/M levels particularly when an unspecified diagnosis code is paired with a high-level E/M code. The most effective ways to combat this medical coding error? Leverage claim scrubber edits and also run a report of the medical practice’s most commonly-reported diagnosis codes. How often do physicians and staff report unspecified codes? Are more specific codes available per the most updated version of ICD-10-CM? Does the practice management system and EHR drop-down menu provide all of these options, or does it limit users?
5. Wrong patient status. Per official CPT coding guidelines, a new patient is one who has not been seen within three years by another physician or other qualified healthcare professional in the same clinic. An established patient is one who has been seen by another physician or other qualified healthcare professional in the same clinic in the last three years. Why is this medical coding distinction important? It dictates what E/M codes you’ll potentially report. The biggest mistake providers make? Assuming a patient who is new to them is also new to the practice.
6. Coordination of benefits errors. The bad news? Coordination of benefits errors occur all the time. The good news? They’re entirely avoidable if you put in the effort on the front end to verify eligibility and benefits, obtain any necessary prior authorizations, determine whether worker’s compensation or auto insurance might be primary, and identify whether Medicare should be secondary or primary. Coordination of benefits errors are particularly problematic at the beginning of the year when plans typically change; however, medical practices should be mindful of them year-round and particularly as the Medicaid redetermination process continues to unfold nationwide. Finally, be sure to leverage the patient portal, check-in kiosks, and real-time eligibility checks to promote medical billing compliance and reduce healthcare claim denials.
Conclusion
Medical coding and billing errors occur all the time because let’s face it: Medical coding is complicated. In addition, payer requirements can literally change overnight, making it difficult to maintain revenue integrity. Leveraging the right technology can help. Learn how edgeMED can help and be sure to check the Healthy Snacks blog for more expert insights, best practices and industry trends.
