Identifying & Addressing Common Medical Billing Errors Pre- & Post-Payment

Billing and coding errorsIt is estimated that as high as 80 percent of medical bills contain errors.1 As healthcare costs continue to rise, so too is the need for healthcare payers to reduce overspending resulting from avoidable billing errors and improper claims reimbursement.

Given the sheer volume of claims submitted each day, capturing and reconciling discrepancies based off of claims data alone isn’t just ineffective — it’s flat-out unviable. Payment integrity systems that review claims data against medical records are helping payers identify potential waste and abuse with greater accuracy than ever before, uncovering immediate and long-term cost savings opportunities.

Here are five common coding and billing errors that could be costing your organization money — and that could be addressed through a comprehensive claims and medical record review.

Discrepancies in Medical Drug Dosage Administered vs. Units Billed

Accurate medication coding is a critical component of the Healthcare Common Procedure Coding System (HCPCS). When a provider submits a drug administration claim, the units billed must match the dosage indicated in the HCPCS long descriptor as well as the volume administered to the patient, including any properly-discarded wastage.

This would be impossible to determine through claims data alone; by examining questionable claims alongside the actual medical records, payers can better identify and recover overpayments made as a result of billing errors and omissions in the billing or coding process.

DRG Coding Errors

Diagnosis-related groups (DRGs) categorize inpatient hospital stays into clinically-similar patient groups, allowing hospitals and providers to optimize the delivery of care and better manage resources.

DRG coding errors are common and run the gamut from clerical oversight to fraudulent practices such as upcoding — that is, attempting to increase reimbursement through improper coding. Whether intentional or unintentional, DRG coding errors can have a substantial impact on the revenue cycle. A thorough review will not only ensure claims have been billed in accordance with all applicable guidelines, but that the medical record reflects the services and diagnoses written in the claim — and that costs are recovered accordingly.

Billing Inaccuracies Around the Place of Service

Because inpatient care is generally more expensive than outpatient care and therefore yields higher reimbursement rates, payers are vulnerable to erroneous claim payments for outpatient services purportedly rendered in an inpatient environment.

There are, however, ways to determine if the level of care reported was actually provided. Targeting only suspect claims, clinical reviewers can verify whether the details of the claim support an inpatient setting or should have been billed as outpatient or observational care. With this information, payers can recover the cost of the incorrect payment and rebill at the appropriate rate.

Overbilling for Post-Hospital SNF Care

Skilled nursing facilities (SNFs) have been in the spotlight recently for fraudulent billing practices, with HHS and DOJ reporting an approximate $47 million in skilled nursing recoveries in fiscal year 2018.2

While not always fraudulent, the fact that SNF reimbursements are based partially on the number of visits utilized provides some incentive to bill for more visits than medically necessary. Based on experience, HMS projects that up to 25 percent of SNF claims will be overpaid by nearly 15 percent of the net paid amount. For this reason, retrospective SNF claim reviews are becoming increasingly essential to maximize cost recovery for payers.

IRF-PAI Coding Errors & Overpayments

Inpatient rehabilitation facilities (IRFs) are designated as such based on the intensity of the therapy provided. According to, IRFs are designed for those with medical conditions requiring intensive rehabilitation, ongoing medical supervision and a coordinated care approach.3

IRF-level care must meet an extensive list of requirements in order to be deemed reasonable and necessary for coverage by Medicare. A review of targeted IRF claims can inform payers whether these criteria were met and facilitate a full or partial take back as applicable.

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