Overcoding, Undercoding, and More: Avoid These Top Medical Coding Mistakes!

Overcoding, Undercoding, and More: Avoid These Top Medical Coding Mistakes!

To err is human, to forgive is something the government will have to decide. Steer clear of trouble by avoiding these medical coding mistakes.

Did you know that in 2016, the fee-for-service improper payment rate for Medicare reached more than $40.4 billion? This was the result of incorrect coding and billing practices rather than fraud alone. 

Among the most common error categories were:

  • Lack of medical necessity
  • Incorrect coding
  • Insufficient documentation (64 percent of all error claims)

Billing errors represent a major drain on the entire Medicare system. Healthcare providers bear a crucial responsibility in guaranteeing the accuracy of their claims. 

Whether done intentionally or unintentionally, inconsistent medical coding and billing lead to overpayment. What’s more, where proof of intention exists, a medical practice can face serious consequences.

What’s the best way to safeguard your practice against these errors and issues? Read on for a breakdown of the most common mistakes made in medical coding.

Overcoding Issues

Overcoding violations refer to assigning an inaccurate billing code for a service or procedure. By using the erroneous code, the medical biller increases the reimbursement fees that they’ll receive.

This includes any type of billing for a more costly, time-consuming, or complex treatment than the patient actually received. 

For example, overcoding might involve billing for a full 45-minute-long doctor’s visit when the patient met with a nurse for five minutes. 

The consequences of overcoding prove serious. 

It remains one of the most pervasive and troubling forms of medical billing fraud. In fact, the U.S. Department of Justice has made the prosecution of medical fraud a top priority.

Unbundling Codes

Medicare and Medicaid offer lower reimbursement rates for procedures that are grouped or bundled. Unfortunately, some medical practices attempt to get around billing for these decreased fees.

How? By unbundling treatment groups into individual categories. 

This practice is known as unbundling or fragmentation. It also falls into the category of medical billing fraud.

Some medical billers have even been caught cutting and pasting notes from previous visits into current treatments. That way, they can buttress their claim that the practitioner diagnosed and treated every condition on a given list.

Electronic health records (EHR) software have also made it easier than ever to unbundle codes. Providers can restrict their EHR menus to only show codes for treatments and diagnoses at maximum reimbursement rates. 

This, in turn, leads to software-generated unbundling. 

These improper billing practices put your medical establishment on a collision course with the legal system.

When it comes to billing and coding regulations, make sure your staff remain up-to-date on training. They should understand the importance of grouping procedures correctly, too.

Unlisted Codes Without Documentation

Medical billers sometimes feel hesitant to report using an unlisted code. Why? Because they believe that unlisted codes are the equivalent of unpaid codes. 

But there are certain circumstances where unlisted codes are required. If no specific Current Procedural Terminology (CPT) code exists for a procedure, then it should be reported as unlisted.

Now, here’s the caveat. This type of listing necessitates documentation. 

To decrease the chances Medicare will deny an unlisted claim, obtain prior authorization from the payor in writing.

This payor will most likely ask your staff fill out a prior authorization form. On this form, you’ll need to describe the envisioned treatment. Providing justifications for its medical necessity also prove essential. 

But what if time is of the essence? And prior authorization can’t be acquired?

Then, submit a copy of the operative report to Medicare. Accompanying this, add any information that supports the medical rationale for the treatment.

With the proper documentation, an unlisted code will be reimbursed. But the process proves more lengthy and usually requires pre-approval.

Missing Information

Medical staff sometimes forget to include necessary information related to a procedure. This represents one of the most common and easiest problems to fix.

What should you watch out for? Make sure that all date-specific information is clearly indicated.

This includes things such as:

  • The date of an accident
  • The date of a medical emergency
  • The date of onset

Billers also forget to include essential details such as the referring physician’s NPI. Or, they may fail to include the legal form of a patient’s name. This is the form of their name as it appears on their Social Security card. 

Forgetting these small yet important details could lead to rejected claims and major hassles. Your medical staff should double-check their work. They should watch out for missing information or writing that appears illegible.

Undercoding Problems

While most of the focus gets placed on overcoding, many physicians neglect the chronic problem of undercoding. Undercoding involves charging less than your work and specialized knowledge are worth. 

This might seem like a prudent practice given the dangers associated with medical billing fraud. But it’ll cost you in the long run. In 2016 alone, undercoded claims cost healthcare providers an estimated $1.2 million

What’s more, undercoding isn’t doing your practice any favors when it comes to avoiding medical billing audits or fraud charges. 

Medical fraud is defined as “knowingly billing for services that were not furnished.” Whether the billing misrepresentation leads to a bigger bill or a smaller one is of little consequence.

Medical billers should always strive for accuracy, no matter the final dollar amount. 

Some facilities undercode for other reasons. These reasons include a lack of sufficient documentation. In other words, a physician’s notes may lack the appropriate amount of detail or prove illegible.

What happens when a medical coder decides to opt for a general code instead of seeking more info? Underbilling means less revenue. It also means the potential of inadvertently taking part in medical fraud.  

Accuracy in Medical Coding

Avoiding the pitfalls of overcoding, undercoding, unbundling, and everything in between requires a well-trained staff. They should be familiar with the most common billing errors and know how to avoid them.

When it comes to medical coding, do your medical billers understand the latest practices and requirements? 

Do they know how to handle special situations? Like when additional documentation is required?

If you’re having trouble finding trusted staff, you don’t have to go it alone. We’re here to help. Contact us today with your medical billing questions and needs.