Common Medical Billing Errors and How They Affect Patients

In today’s complex healthcare system, medical billing connects patients, providers, and insurers. It’s designed to streamline the financial side of care, but it’s common to deal with errors in billing. These mistakes, whether large or small, can be very stressful for patients, as it causes unexpected expenses, delayed care, and long-term financial consequences. Understanding the types of medical billing errors and how they affect patients is important in the healthcare scene.

Types of Common Medical Billing Errors

There are different types of medical billing errors, which are unfortunately common. They can cause claims to be denied or increase what the patient has to pay out of pocket. From over-billing to duplicate charges, patients can be affected in several ways.

To prevent this, many healthcare providers work with third-party billing services that can handle the entire financial process. For instance, an ABA therapist might hire ABA billing services to take care of it without further administrative burden.

Over-billing

One of the common errors that healthcare providers make is over-billing, where they charge patients more than they’re meant to pay. This can happen when providers bill for services that were never performed, inflate the cost of procedures, or apply higher rates than agreed upon by insurance contracts.

Over-billing means patients pay more than they should, but it also erodes trust in the healthcare system. Many patients might not even notice the error until it’s too late due to the medical jargon and complex statements.

Coding Mistakes

Medical billing depends heavily on standardized codes like ICD (International Classification of Diseases), CPT (Current Procedural Terminology), and HCPCS (Healthcare Common Procedure Coding System). Even minor errors in coding can cause inaccurate charges.

The different types of mistakes include:

•       Upcoming: This involves charging for a more expensive service than was provided.
•       Downcoding: In this case, providers assign a less expensive code, and this might limit insurance coverage or misrepresent the complexity of care.
•       Misuse of modifiers: Incorrectly altering codes to maximize reimbursement.

Coding mistakes can cause insurance providers to deny claims, leaving patients with very high bills. They can also affect future treatment approvals if the records don’t properly reflect the medical care the patient received.

Duplicate Charges

Duplicate billing happens when a patient is charged more than once for the same service. This usually happens because of administrative oversights or system errors.

Although duplicate charges are sometimes easy to stop, they can still go unnoticed, especially when the bill is very long and has a lot of unfamiliar terms. Patients might pay for services twice, which increases their medical costs.

Incorrect Patient Information

Something as simple as a misspelled name, wrong date of birth, or outdated insurance information can cause billing errors, which insurance companies are quick to identify and reject the claim.

When this happens, patients might be forced to resubmit paperwork, delay care, or face rejection from their insurer. This leads to unnecessary stress and financial responsibility.

Unbundling Medical Services

Unbundling usually happens when services that should be billed together as part of a single package are itemized separately. For instance, a surgical procedure is meant to have anesthesia, supplies, and recovery care in one bundled code, but if they are charged separately, it increases the disbursement. This can inflate patient bills and lead to higher expenses.

Not Applying Insurance Adjustments

Insurance companies usually negotiate discounted rates with healthcare providers. Sometimes, however, these adjustments might not be applied correctly and patients may be billed the full amount.

Patients might believe that they owe more than they actually do, leading to financial strain until corrections are made.

How Medical Billing Errors Affect Patients

Most healthcare providers only view medical billing errors as administrative inconveniences, but they have no idea how much they can affect patients.

Financial Stress and Debt

Unexpected bills or inflated charges can overwhelm patients, especially those already managing high healthcare costs. In fact, medical debt is one of the top causes of personal bankruptcy in the U.S., and billing errors can make the situation so much worse.

Delayed or Denied Care

Errors in billing or coding can cause insurance claim denials. Patients may have to postpone their critical treatments until the issues are solved, exacerbating their health conditions.

Emotional Distress

Medical bills and insurance statements are pretty complex, so they leave patients feeling confused and frustrated. It’s also distressing to constantly dispute medical insurance claims and navigate the red tape.

Erosion of Trust

When patients regularly encounter billing errors, they might lose faith in the healthcare provider. This causes them to consider an alternative whenever they need medical attention again.

Administrative Burden

Patients usually bear the responsibility of identifying the billing error, contacting stakeholders, and negotiating with insurers. This can consume time and money that should be focused on recovery.

How Billing Services Can Help

Source: National Cancer Institute via Unsplash

Given the complexities and the importance of medical insurance payouts, healthcare providers may want to consider partnering with a third-party billing service.

Billing services hire trained professionals who can examine bills and insurance statements for errors like duplicate charges, incorrect coding, or failure to apply discounts. They also reduce the administrative burden on the healthcare center and patient by communicating directly with providers and insurers to resolve claim denials.

Third-party billing services can also negotiate bills between providers and insurers to reduce costs and can prevent future errors by managing the entire billing process, so no patients are overcharged or misbilled.

Navigating Common Medical Billing Errors

Medical billing errors are very common, from simple clerical mistakes to more complex coding and billing issues. Whether it’s over-billing, duplicate charges, or misapplied discounts, these errors can lead to financial hardship, emotional distress, and sometimes delays in care. Third-party billing services can address all these challenges by reviewing bills and ensuring accuracy, adding clarity and fairness to the billing process.