Most Common Medical Billing Errors And How To Avoid Them - Sypore
Medical Billing Errors

Most Common Medical Billing Errors And How To Avoid Them

Juggling between rendering quality patient care and keeping your practice profitable can be quite hard and often results in negligence in one area or the other. Billing errors are common in medical practice; however, failure to address them quickly can lead to serious financial problems and loss of revenue for your practice.

The medical billing and coding experts at Sypore want you to be aware of the most common errors that can occur during the intricate medical billing process. All medical billing errors, no matter how common, can be avoided and help your staff save time and increase profitability. Below are the four most common medical errors your practice can avoid to get the most profit in return for your services:

Upcoding and Undercoding

Upcoding occurs when a patient is billed more than the due money. It can happen in two different situations. One, the level of performed service or procedure is upgraded or inflated purposely by the healthcare provider to receive higher reimbursement. The second case is when the patient is charged money for a procedure/service that was never performed in the first place. Both are examples of healthcare fraud where providers boost their revenue by receiving excessive payments than what is owed by the patient.

Upcoding usually stems from simple clerical errors committed by the billing department or healthcare provider when entering treatment codes or patient information. However, upcoding errors cause a web of issues that can result in loss of credibility for the practice and subject the healthcare provider to hefty penalties or even federal prison if left untangled.

Undercoding is another case of incorrect medical billing, which occurs when a healthcare provider fails to capture all work performed by leaving off medical codes for less expensive procedures. Although it can happen due to oversight, some practices intentionally undercode to avoid an audit or save money for a patient.

Undercoding can result in substantial revenue loss and create skewed claims data, which consequently lowers your reimbursement rates. Moreover, your books may show less revenue than your practice is actually making, resulting in extra work hours for your staff to diagnose and remedy the issue.

How to Avoid Upcoding and Undercoding?

In one facility audit conducted by Duke Health, results showed that the 300 healthcare providers coded correctly only 30% of the time. The best way to avoid undercoding and upcoding is to hire a professional coding team and get it in the habit of double-checking its work. Moreover, regularly train your team to keep them updated with coding guidelines and policies. By having multiple checks-and-balances systems in place and consistently following medical billing guidelines, your practice can significantly reduce the likelihood of such errors to zero.


Some medical billing codes are devised to be used for a group of procedures/services generally performed together. When the components of such procedures, which should be billed as a single charge, are billed under separate coders, it is known as unbundling. Not only is unbundling illegal practice, but it also falls under healthcare fraud, as it can inflate the profits of a medical facility.

How to Avoid Unbundling?

The consequences of unbundling can be catastrophic for your practice, resulting in loss of reputation and heavy penalties. Fortunately, you can effectively eliminate unbundling errors with a few hassle-free measures. Firstly, search for tools and software that can identify electric codes for components of a procedure that should be bundled together. Most online tools can also tell if you need modifier codes to provide extra information about procedures performed, which helps maximize reimbursement.

Moreover, provide resources for your billing staff to stay up-to-date on billing and coding trends, as medical billing codes and trends in the US are prone to change frequently. While it may seem time-consuming at first, it will save your practice time, money, and potential legal predicaments in the long run.

Incorrect Diagnostic or Procedures Codes

Accurately coding claims is imperative to avoid audits and ensure your practice receives the maximum compensation for its services from payers. Coding mistakes usually occur when a claim is submitted to the insurance company with an incorrect diagnostic or procedure code. Hitting just one wrong key can enter a whole different procedure code into the system, resulting in an instant denied claim once you bill the payer for it.

If your practice is frequently receiving denied claims because of incorrect diagnostic codes, there is a high chance that your billing team is not following the coding rules correctly. The most common reason for inputting wrong codes is human handwriting errors. However, sometimes, diagnosis and procedure codes may be input incorrectly due to the usage of outdated codes by the billing team.

How to Avoid Entering Incorrect Diagnostic or Procedure Codes?

Diagnostic and procedure codes are updated regularly every year. Hence, the medical codes most commonly used by your billing team might be changed or deleted in the yearly update. If this occurs and your team enters the outdated code, your claim will be denied by the payer.

The most effective way to prevent receiving denied claims is to ensure that all your coding books are revised and reviewed every year – especially the ones containing the most commonly filed codes. Keeping an updated list of procedure codes and checking it against the current billing year before making a claim will help prevent the number of denied claims.

Another way to improve accuracy and minimize human billing errors is to switch from a paper-based system to an electronic health record (EHR).

Failure to Verify Patient Insurance

Failure to verify patient insurance is among the top medical billing errors that result in denied claims. This error typically stems from an overreliance on routine. In an attempt to save time, the front desk staff might let the patient through without verifying their health insurance policies. Or, if a patient visits the office frequently, your staff might assume their insurance provider or coverage plan has not changed and not double-check their eligibility. Most commonly denied claims include services not covered by the insurance plan, insurance terminated or no longer eligible, and maximum benefits met.

How to Avoid Insurance-Related Denials?

Insurance is prone to change often, so your billing team must implement a verification step into the billing workflow for every patient visit, even for the most regular patients. To avoid receiving denied claims, your team should verify patients’ insurance, including effective dates, coverage period, deductibles, and copayments, before rendering any services. Pay special attention to these four aspects that cause insurance-related denials:

  1. Coverage terminated or otherwise ineligible on the date of service
  2. Services not authorized
  3. Services not covered by the plan
  4. Maximum benefits reached

By introducing a step in your billing workflow that verifies the patient’s insurance at every visit, you’re ensuring there are no policy-related issues that could result in denied claims and thus, saving your practice valuable time, money, and labor.

Avoid Medical Billing Errors With Sypore

Sypore employs a holistic, expert approach to help your practice avoid common billing errors that can result in potential revenue loss. With years of medical billing experience under our belt and state-of-the-art technology backing us up, we can help you traverse through the intricate maze of medical billing to get paid quickly and easily.

Our billing team provides dedicated collection and claims processing – among other services – to help you receive collections swiftly – without any setbacks. We have the resources to help keep your practice profitable and your business growing without compromising on the quality of patient care. Contact us today to experience a constant revenue stream unhindered by common billing errors!

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