8 medical coding and billing traps physicians must avoid when opening a private practice
You’ve secured your office location, hired clinical and administrative staff, and purchased equipment and supplies. Now you’re ready to start seeing patients. Everything is off to a good start until you submit your first batch of medical claims and quickly realize that revenue cycle management (RCM) is a bit more complicated than you anticipated. What happens if you don’t identify and correct errors immediately? Your newly opened medical practice could begin to experience cashflow challenges, and you could find yourself facing a negative operating margin. Appealing and resubmitting medical claims increases the cost of doing business—and it’s not the way to promote financial sustainability.
When starting your own medical practice, be on the lookout for the following eight medical coding and billing traps:
1. Reporting unspecified ICD-10-CM diagnosis codes. While it may seem trivial to report nonspecific medical codes, many payers will deny claims that include them. Taking a few extra seconds to pick the medical code that best describes the patient’s condition helps ensure clean claims.
2. Forgetting to obtain prior authorization. Prior authorizations can be tricky because you may not always know when payers require one. Best practice is to look at each payer’s portal regularly and maintain and up-to-date list of all services and procedures that require prior approval. Then make sure you obtain the authorization prior to claim submission.
3. Selecting the first available code in the electronic health record (EHR) drop-down menu. To be as efficient as possible, many physicians open the patient’s electronic record, search for the relevant diagnosis, and select the first medical code that appears. While this may save time in the short-term, it definitely adds time on the back end when payers realize the diagnosis code is inconsistent with clinical documentation. Then they deny the claim because of it. Alternatively, scroll down through the list because chances are there’s a better—more accurate—code instead.
4. Assuming all payers have the same rules. When you know one payer’s medical coding and medical billing rules, you know one payer’s medical coding and medical billing rules. That’s it—plain and simple. For example, assuming all payers cover a particular service or require the same CPT modifier in certain clinical scenarios, can get you into trouble. While there may be areas of overlap, you’ll need to review and follow each patient’s coding and billing guidelines to ensure revenue integrity.
5. Defaulting to evaluation and management (E/M) level 99213 for all patients. When it comes to medical coding and medical billing, you may be tempted to ‘play it safe’ by reporting E/M code 99213 for all—or nearly all—office visits. The problem with this is that in some instances, doing this means you’ll undercode your services and in others, you’ll overcode. Undercoding is bad for business because it means you’re leaving revenue on the table. There’s roughly a $36 difference between E/M levels 99213 and 99214. This means if you undercode five patients a day, you lose $175 a day or $42,000 a year. In contrast, overcoding (sometimes called upcoming) could make you vulnerable to audits and recoupments. Review updated CPT codes and E/M guidelines to ensure revenue integrity.
6. Overlooking the front end of the revenue cycle. In your quest to build a patient roster and send claims as quickly as possible, it’s easy to lose sight of the importance of proper patient registration. One demographic or insurance error or omission can cause a claim denial. It’s critical to invest in the front end of the revenue cycle process by hiring skilled front desk staff and/or leveraging check-in kiosks and patient portals.
7. Underestimating the importance of clinical documentation. New physicians may not fully appreciate the role of clinical documentation in the revenue cycle. As payers continue to leverage artificial intelligence and scrutinize documentation more than ever before, physicians must ensure documentation is accurate, complete, and specific—and tailored to each unique patient encounter. Creating a clinical documentation improvement workflow in your medical practice can help.
8. Waiting too long to submit medical claims to payers. In the hustle and bustle of opening a private medical practice, submitting medical claims may not be a top priority—but it should be. If you wait too long, payers will deny the claims. Note that the filing period could be as short as 90 days or as long as 365 days.
Looking ahead
Ready to take control of your medical practice’s financial future? Consider these tips when opening a private medical practice:
Hire the right medical practice manager. This is the person on whom you can lean to educate you on important RCM topics. Here are some ‘green flags’ to help you find the right fit.
Leverage the right EHR and practice management system. Your health information technology should include alerts, reminders, automated tools, and other resources to help you avoid costly medical coding and medical billing errors.
Invest in ongoing education. Set aside a portion of your budget to educate yourself and your staff about important medical coding and medical billing changes annually.
Starting your own medical practice is an exciting time; however, it’s also a time when you’re particularly vulnerable to RCM errors. Learn how edgeMED can help and be sure to check the Healthy Snacks blog for more expert insights, best practices and industry trends.
