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An in-depth look at some of the most common billing mistakes in health care and what practices can do to avoid them.
Today more than ever, practicing medicine is a business. Practices need to be run with the bottom line in mind, just like companies in any industry. One of the quickest ways to put a practice's bottom line in peril is by committing billing mistakes. Unfortunately, there are a handful of billing mistakes that are far too common in health care.
Miscommunications between providers and coding professionals often lead to billing mistakes. These mistakes can become even more common when a practice decides to hire a third-party billing company as passing off the issue can breed further communication lapses, say experts.
Here's an in-depth look at some of the most common billing mistakes, how and when they occur, and what a practice can do to avoid them.
Common Billing Mistakes
A common billing mistake, medical necessity cases, is becoming more and more common, according to Brian Bewley, JD, a health care attorney at Bass, Berry & Sims PLC in Nashville, Tenn. Medical necessity infractions occur when a patient's condition doesn't warrant the services a practice bills for. For example, if a patient presented with stomach pain and a clinician ordered images of his right foot, medical necessity may come into question.
"There's not only a review of what you billed for, [payers] look at the medical records and the underlying condition of patients to determine whether or not the [billed] services meet medical necessity," says Bewley.
Another common billing mistake is the misuse of modifiers while coding, according to Michael Fossum, CEO of Nobility RCM, a Chandler, Ariz.-based company helping practices with financials.
A modifier is a code that physicians use to indicate that a service or procedure has been performed and altered by a specific circumstance, but has not changed in its definition.
"If the proper separation modifier is not put in place, or a discriminate procedure modifier is not put in place, the insurance company will recognize that multiple procedures were produced on one claim," says Fossum.
Modifiers, and coding in general, can be particularly tricky for small practices lacking the resources to hire a third-party billing company. Hiring a partner to perform billing and coding services is something Fossum says is strongly in due to the complicated nature of the process.
"It is such a time intensive and knowledge intensive process, you have to spend a lot of time on the billing and coding aspects of a practice," says Fossum.
A third common billing mistake that practices make has to do with up-coding (billing too much for the service provided), or under-coding (not billing enough).
"A lot of people think that if they over code or up-code, it's the worst thing they can do. But, under-coding is just as bad," says P.J. Cloud-Moulds, a practice consultant and head of Turnaround Medical AR Recovery in Sioux Falls, S.D.
Under-coding happens when a practice fails to accurately code for all services they performed during a visit. This can leave valuable dollars on the table and cause incorrect reimbursement. The thing that makes under-coding so dangerous is that it's impossible to catch without an audit, and by that time "a small practice could have already shut down," says Cloud-Moulds.
Reasons for Mistakes
Why do practices continually make the same billing mistakes? It all starts with a lack of understanding, according to Cloud-Moulds. "Some physicians are consistently coding 'office visit, office visit, office visit.' But if you're doing something else during the visit, you need to code for it," she says.
Physicians go to medical school, not coding school, so a lack of knowledge can always be a factor, she adds.
Bewley points to the fact that health care laws are constantly changing and overly complex as to why billing mistakes are made over and over again. "Most physicians and practices that I work with are well intentioned. They aren't trying to do something fraudulent. But because there's so much scrutiny of billing and reimbursement, even unintentional errors can lead to a need to refund money to payers, and false claims act cases," says Bewley.
With health care regulations constantly changing, physicians not equipped with the latest information can find themselves in hot water. Physicians don't have a lot of free time to begin with, so setting time aside to keep up with coding and billing regulations can add to the burnout epidemic.
Outsourcing the billing and coding to a third party can take pressure off a practice, but it can also lead to unintentional error through communication breakdowns. Any time work is passed off, the chance of miscommunications become larger.
Elderly physicians may have a harder time adopting new regulations, as old habits are often hard to break, Fossum says. When a doctor has been in practice for many years, they sometimes stick to the billing codes they typically do in the office, he adds.
"A doctor who has been around 10 to 15 years still may have an encounter form or billing sheet and they just check off that they have done that procedure even though in the room they may have done various analogs to that procedure or other procedures," says Fossum.
Size Doesn't Matter
The government audits practices of all sizes, and thinking your practice is too small can lead to disaster, experts say.
Bewley spent part of his career with the Office of Inspector General for the Department of Health and Human Services, gaining insight on the ways the government views health care organizations. "As a former government [employee], I can say that the government doesn't have any criteria for audits or investigations, everyone is fair game."
Government regulators do spend more of their time auditing larger practices, according to Fossum, but that doesn't exclude them from pursuing small practices at the same time. "Nobody is out of the woods or sequestered from the [auditing] process. The government has put significant resources into looking into everybody."
There are certain actions, all of a sudden changing the way your practice consistently codes that will always trigger an audit, no matter the size of the practice, according to Cloud-Moulds. For example, "If you all of a sudden stop coding 'office visit, office visit, office visit,' you could trigger an audit," she says.
When it comes to being audited, it's all about a practice’s documentation. "If Medicare can come see your chart notes, and they see detailed documentation, they will move on. Without good documentation, Medicare is going to see a problem and want to look at more charts. Size doesn't matter," says Cloud-Moulds.
Avoiding the Common Mistakes
Bewley suggests practices engage in their own in-house auditing and catch errors before they gain steam. "Audit both the services you're providing and how you are billing for those services. You want to have some semblance of a compliance program. Unless you're checking on your own practice, you won't know [of errors] until someone else tells you," says Bewley.
Often, especially in small practices, physicians paying more attention to the billing and coding process would go a long way towards cutting down billing errors, according to Fossum.
"Most physicians think their piece of the practice management pie is the patient care. Altruistically, that is where their intentions should lie…you can't stick your head in the sand as a practice owner or a physician who needs to pay attention to those business pieces of the practice," says Fossum.
Cloud-Moulds says education is the only way for practices to stay on top of billing and coding regulations, suggesting webinars from Medicare as a good place to start. She also says having billing and coding in-house is an advantage.
"If you don't have a conscientious billing department they will just let a denied code sit as an error and not teach you. If you have an in-house billing department that is involved with the education with the practitioners, that's where your advantage is," says Cloud-Moulds.
Furthermore, practices should always pay attention to the mail they receive from payers, even if it appears to be a simple postcard. "That little postcard is the payer's requirement to let practices know of a change they made in the provider network or the provider directory. Something could have changed that could affect the way you are coding and/or billing," says Cloud-Moulds.