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10 Common Medical Billing Mistakes That Cause Claim Denials – Part 2

We discussed the first five most common medical coding and medical billing mistakes that cause claim denials in our previous post. Here are the next five common reasons claims are denied.

6. Duplicate billing.
medical billing errors claim denials

Many times, a duplicate bill is the result of human error. They can result from resubmitting a claim but not removing it from the patient account. As a result, all claims processing systems contain criteria to evaluate all claims received for potential duplication. The claims are placed into two categories: exact duplicate or suspect duplicate. Due to the nature of the service, some claims may only appear to be duplicates. Proper coding of the service with the applicable condition codes or modifiers will identify the claim as a separate payable service and not a duplicate. Exact duplicate claims will contain the same following information:

  • HIC number
  • Provider number
  • From date of service
  • Through date of service
  • Type of service
  • Procedure code
  • Place of service
  • Billed amount

7. Upcoding or unbundling.

Upcoding refers to a provider’s use of CPT Codes to bill a health insurance payer for providing a higher-paying service than was performed. It is critical to understand that upcoding is illegal. It is considered fraudulent practice used by providers who bill for additional services not documented or performed. Another common example of improper coding is called “unbundling” or “fragmentation.” Some health care providers will bill separately for each procedure or test, which totals more than the special reimbursement rates. By adding modifiers, this act may seem profitable but does not become legal. Medicare reimburses surgeries based on a package of care (global surgery package).  It is very important to understand the usage of modifiers and their purpose in the role of coding.

8. Further documentation requested to support medical necessity.

Sometimes a payer requires medical records before it can adjudicate a claim. This may include the patient’s medical history, physical reports, physician consultation reports, discharge summaries, radiology reports, and operative reports. Medicare and private payers recognize medical necessity as a deciding factor for claims payment and processing. Each payer might have its own definition but the outcome is the same. The best way to stay within the bounds of medical necessity is to only perform if there is a clear medical reason to do so. The key is always to have documentation to support level of service, should records be requested. No documentation equals no services performed. According to section 1862(a)(1)(A) of the Social Security Act, Medicare will not cover services that “are not reasonable and necessary for the diagnosis or treatment of illness or injury or to improve the functioning of a malformed body member.”

9. Referral or prior authorization required.

There is a referral and prior authorization that is at times required and it is important to understand the difference between the two. The primary care physician, who sends the patient to another healthcare provider for treatment or tests, issues a referral. The payer performing the necessary service(s) issues a prior authorization. It is understood by carriers that obtaining prior authorization is still not a guarantee of payment. The submitted claim must be 1) supported by medical necessity, 2) filed within the timely filing requirements and 3) filed by the referred or authorized provider.

10. Services not covered/coverage terminated.

Because insurance information can change at any time, it’s critical to verify eligibility every time services are provided. Make sure the patient’s coverage has not been terminated, their maximum benefit has not been met, and the service you’re providing is covered by their plan. It is crucial to understand the patient’s plan and the services you are providing. Although if following correct guidelines and using supporting documentation, plans with a cap can still cover services. Some examples of these are physical therapy, speech or occupational therapy and the use of correct modifiers.  Be proactive, ask them each time. It is also very important to verify before doing procedures and services requiring precertification under the terms of a member’s plan. Required authorization needs to be supplied when filing the claim.

To help keep errors to a minimum, consider using a medical coding and billing software that supports your needs. Learn more about PracticeSuite today.

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