Smart Practice: Common Errors in Medical Billing and How to Avoid Them

Updated on August 5, 2020

Anyone who takes on the administrative tasks of a medical practice is aware of the errors common in billing and coding. Although these are avoidable, the fast-paced nature of the work environment makes them a common problem. When these mistakes are left unaddressed, they result in several issues that negatively affect your practice’s bottom line and reputation. By educating yourself on the causes of these errors, you will be able to identify them before they get out of hand. Additionally, you may determine the right course of action to solve them.

Consequences of Billing and Coding Errors

The consequences of poor billing and coding practices vary from minor inconveniences to major problems, like rejected claims. Although medical billing companies are familiar with these, you will still need to familiarize yourself with them to get a better understanding of the situation. It also gives you insight on how to prevent the mistakes that lead to them.

Loss of Profit

When medical billings are delayed, or claims are rejected, your practice will suffer from a loss of profit. Delayed payments make it difficult to project cash flow, creating challenges in how you manage other monetary needs such as rent.

Denied Claims

Denied claims are the most common consequence of poor billing and coding management. When insurance companies find inconsistent information, missing information, inadequate coverage, and other similar errors, they will likely reject a claim. This makes the processing time longer for you and the patient.

Disgruntled Patients

Poor billing and coding practices will eventually affect patients. Denied claims create unnecessary stress on their part, causing them to rethink their next visit to your practice. Disgruntled patients might spread their negative experiences and give your practice a bad reputation.

Common Causes of Billing and Coding Errors

Avoiding these consequential scenarios is important in running a successful practice. Familiarize yourself with what causes these errors to learn how to prevent them.

Duplicate Charges

Duplicate charges are fairly common, especially when tests and procedures have been added or canceled unexpectedly. But leaving this type of error unaddressed opens up your practice to fines. Before issuing a statement, make sure to double-check the items to catch any mistakes.

Incorrect Information

Most claim denials come from incorrect patient information. It can range from incorrect name spellings to misprints of policy numbers. When this happens, patients will likely be charged the full amount by their health plan provider.

Unbundling or Upcoding

Upcoding is a practice in which a patient’s condition is inflated to necessitate a more expensive procedure. Unbundling is when separate codes are used for inter-linked procedures, even when there are bundle codes available. Both these practices are considered illegal acts that increase claim amounts and inflate revenue. Although these usually occur due to clerical errors, they can cost your practice hefty fines.   


Undercoding occurs when a patient is not billed for a specific procedure or service. Much like unbundling and upcoding, it often results from clerical errors. It may also stem from the desire to help out a patient who doesn’t have health insurance. Either way, undercoding will result in profit loss and fraud fines for your practice.

Solutions to Billing and Coding Errors

There are several solutions available to address billing and coding errors properly. Find out more about them to determine what best suits your practice.

Train Administrative Staff

You can’t expect new employees to know your billing and coding procedures immediately. Without proper training, they will likely make mistakes. Make sure that there is enough time to train new staff members before letting them work full-time. Assign the appropriate person to conduct this training to prevent miscommunication of processes and tasks.

Hire Additional Personnel

As mentioned, several billing and coding mistakes may be due to human error. This is typical for practices that don’t have proper administrative staff. Sometimes, doctors and nurses are forced to carry out administrative responsibilities on top of their workload, causing confusion and miscommunication. By hiring additional personnel, you have the right individuals focused on your back-end practices.

Outsource These Services

Outsourcing has become a popular option for businesses across several industries. The healthcare sector is not immune to this; many small to midsized practices choose to outsource. It allows them to work with professionals at a reduced cost because they don’t have to go through the lengthy hiring and training process.

Utilize Billing Software

The healthcare sector has seen a surge in technological advancements in the last decade. These days, it’s typical for a practice to use medical billing software in their processes. It allows them to streamline the billing and coding process while reducing the margin of error. Billing software can be customized to your specific needs and procedures.

Make sure your practice is operating optimally. Learn how to identify common mistakes to prevent them from evolving into serious problems. Doing so will help you determine the right solutions for them, saving your practice from a potential loss of income, fines, or ill repute.

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