Top 3 Medical Billing Mistakes That Lead To Claim Denials

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As a full-service medical billing and revenue cycle management company, we’ve familiarized ourselves with the most common medical billing mistakes faced by healthcare providers. We’ve also seen how technology and software advancements have minimized these errors but presented new ones never faced before, especially with increased online patient care through Telehealth, expanded insurance coverage and benefits, and stricter penalties on vague treatment plans.

We wrote this article to highlight the top three medical billing mistakes we saw first-hand as a medical billing company. We’ll also go over why medical billing is important, why most mistakes are still made, and how Hansei is dedicated to improving and minimizing errors.

Why Is Medical Billing Important?

The ultimate goal of medical billing is to ensure healthcare providers are reimbursed for their services from insurance companies like Aetna, Blue Cross, or Cigna, government plans like Medicare and Medicaid, and out-of-pocket payors. Large healthcare providers like hospitals or multiple practice offices usually have the extra staff to handle large influxes of patients and services, while a separate team handles medical billing and coding. But these providers are still struggling to meet the increasing demand in healthcare and continuously changing insurance requirements. Smaller practices find themselves overloaded with time-consuming medical billing tasks, distracting them from patient care.

Companies that partner with healthcare providers and take over their medical billing process have been popping up nationwide, and experts estimate the medical coding and billing industry will be worth an estimated 13.9 billion dollars by 2030. Healthcare providers recognize the need to outsource their medical billing services, but this doesn’t mean they will revolutionize and solve their problems overnight, even if they hire a Fortune 500 medical billing company.

Read more: The Future Of Medical Billing

Why Are Medical Billing Mistakes Still Made Today?

Why Are Medical Billing Mistakes Still Made Today?

Most medical billing mistakes are made today for the same reason they were made ten years ago; human error. Until AI completely takes over healthcare (experts don’t think it’s going to), staff are still responsible for providing, documenting, and billing medical services. Most billing software requires human coding and input, and if a nurse or doctor has spent their entire workday filing and billing reports, simple fatigue and a loss of mental energy can turn a “9” into an “8.”

If you provided an expensive medical service like an inpatient stay or same-day surgery, the incoming claim denial can cost your practice money as the claim sits unresolved. Stack these mistakes over multiple days and codes, and they can pile up when insurance companies file bulk denied claims, potentially diminishing your relationship with them. This can cause them to take your office out of their network or refer patients to other practices with better billing compliance.

This will eventually affect your practice’s profitability, extending from patients returning to your office if their bills are wrong to your own staff members leaving after their paychecks are affected.

Read more: 14 Important Questions To Ask Your Medical Billing Company

Top 3 Medical Billing Mistakes That Lead To Claim Denials

Top 3 Medical Billing Mistakes That Lead To Claim Denials

As a medical billing and revenue cycle management company, we’ve analyzed and identified the most common mistakes we saw in 2022, allowing us to give first-hand experience in the challenges faced by our clients and partners. Since our focus is mainly on ambulatory surgery centers and behavioral healthcare facilities, these mistakes can be isolated to field-specific problems. Still, we’ve heard other billing companies and providers face these same issues.

#1 Level of care transitions are unclear

Level of care transitions refers to when patients are transferred to another facility or program or are processed to the next phase of treatment. For example, addiction treatment centers usually start with patients with a detox program. This level of care can be extensive, ranging from clients staying overnight at a facility, providing medication to ease substance withdrawal symptoms, and initial long-term treatment planning. Once the detox phase is over, patients are recommended and transferred to the next level of care, either an inpatient or partial hospitalization program.

Another example includes sending a patient home after a same-day surgery at an orthopedic practice. The doctors may have recommended the patient attend occupational or physical therapy to help strengthen the bones or joints they were concerned about. This is where medical billing mistakes can peak and present the most issues.

If the medical billing claim lacks information about when the patient was transferred, arrived at the new facility, or given different services, insurance companies and payors can deny reimbursement and require you to appeal or resubmit the claim.

#2 Treatment plans were incomplete

In the healthcare world, treatment plans give patients clear expectations about the cost and level of care they will receive in the coming months. An unexpectedly large bill can cause patients to call their insurance company and challenge your practice’s claim. If multiple patients report inconsistent or unclear bills for treatment plans they were uninformed about, insurance companies can gather enough information and discrepancies to take a clearer look at your medical practice and potentially rethink keeping you in-network. This can also affect renegotiating managed care contracts when your practice grows and wants to improve services.

For example, private therapy practices and behavioral centers that provide psychotherapy need to write concise patient notes to clearly describe patient symptoms, progress, disorders, and session times. Here we provide two examples of a counselor’s session notes.

Include side-by-side images of a good and bad note

On a bad note, we see the counselor describe “multiple relapse experiences,” “drug of choice,” and “chemical use history.” But this vague terminology and lack of other information make it hard to identify the patient’s needs and the counselors’ recommended treatment plan; as we can see under their observation, “Client needs more time to learn the skills he needs to remain sober long term.”

In the good or gold-standard note, the counselor has clearly expressed and labeled their observations, type of therapy session, client needs, and treatment recommendations. They provide the codes and specific substance use disorders the patient is experiencing, highlighting which disorders are active, which are in remission, and the most current symptom episodes. The counselor also clearly highlights their treatment goals and the patient’s mental status exam results. This information is just as important as providing the service and helps practices keep track of their services and avoid medical billing errors.

#3 Insufficient programming hours

Forgetting to report how long a service was provided or inputting the improper treatment start and stop times was one of the most common medical billing errors we saw in 2022. Most patients know how long they were at a doctor’s office, mental health, or addiction treatment center, and if they see their bill has more hours or days than they remember, they’ll probably call their insurance company and challenge the bill. After all, most billing issues are caused by using the wrong billing code or a duplicate charge for one service rather than the practice providing the wrong service to the patient the day they’re at the facility. Medical coders should always double-check the CPT codes and ensure the staff member uses the right ones.

As a standard, we always recommend providers perform daily and weekly chart audits, double-checking patient information, insurance information, phone numbers, number of billable hours, and anything related to state, national, and insurance guidelines. These codes are not just meant for the initial submission process; they can also back your medical bill if the insurance company or patient mistakenly challenges your claim. Once you’ve established a strong reputation with your in-network payors, they’ll be less likely to criticize your medical billing procedure and feel confident your following proper practice management.

Contact Hansei Solutions

At Hansei Solutions, we never back down from learning and improving our services, aiming to help grow our client’s businesses directly alongside us. Our first-hand experiences with small and large healthcare providers equip up with the skills and knowledge we need to improve the medical billing process for everyone.

Many online blogs discuss multiple coding errors that providers and other billing companies face. But at Hansei Solutions, we focus on improving the source of these errors by educating and informing our clients about the latest trends and procedure codes. Because we grow with you, we take your practice’s needs seriously and dedicate personal teams to handle medical billing, utilization review, credentialing, benefits verification, and more. Contact us today to learn more about our solutions and latest software advancements, like our introduction of Benji.

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