The world of medical billing and coding is evolving rapidly. With new technologies, shifting payer guidelines, and a greater focus on value-based care, 2025 has brought both incredible advancements and complex challenges. Amidst these changes, one issue remains stubbornly persistent: medical coding errors.
From claim rejections and payment delays to compliance risks and revenue leakage, medical coding errors can have severe consequences for healthcare providers and patients alike. In this comprehensive guide, we take a closer look at the Top 10 Medical Coding Errors in 2025—and provide clear, practical strategies to prevent them.
Whether you’re a medical coder, healthcare administrator, or revenue cycle manager, this newsletter will help you tighten your coding operations, improve accuracy, and stay ahead of audit risks.
1. Upcoding and Downcoding: Misrepresentation of Services
What’s the Problem?
Upcoding refers to assigning codes that reflect a higher level of care than actually provided. Downcoding is the opposite—coding a lower-level service despite higher complexity.
Why It Happens:
- Misinterpretation of documentation
- Pressure to maximize revenue (in the case of upcoding)
- Fear of audit or insufficient documentation (leading to downcoding)
Consequences:
- Denials and claim rejections
- Payer audits and recoupments
- Legal action under the False Claims Act
Prevention Strategies:
- Provider Documentation Training: Physicians must understand that every service documented should support the code submitted.
- Routine Audits: Perform quarterly internal audits to identify patterns of misreporting.
- Natural Language Processing (NLP) Tools: Invest in smart software that analyzes provider notes and suggests appropriate CPT codes in real time.
2. Incomplete or Missing Documentation
What’s the Problem?
A claim is only as strong as the documentation that supports it. Missing or vague clinical information makes it impossible for coders to assign accurate codes.
Why It Happens:
- Clinician time constraints
- Lack of understanding of what coders need
- Inadequate EHR templates
Consequences:
- Higher denial rates
- Delayed payments
- Compliance risks
Prevention Strategies:
- Customized EHR Templates: Use templates that prompt for relevant details (location, duration, severity, etc.).
- Clinical-Coding Collaboration: Encourage a culture of teamwork where coders can query providers for clarification.
- Regular Documentation Workshops: Conduct monthly training sessions to reinforce best practices.
3. Incorrect Use of Modifiers
What’s the Problem?
Modifiers provide additional information about a procedure or service. Using the wrong modifier—or failing to use one—can alter the meaning of a code and impact reimbursement.
Why It Happens:
- Misunderstanding the purpose of modifiers
- Overlooking payer-specific modifier rules
- Copy-pasting errors from previous claims
Consequences:
- Denials and underpayments
- Increased scrutiny during payer audits
Prevention Strategies:
- Modifier Reference Charts: Create quick-reference sheets for commonly used modifiers.
- Team Training: Host quarterly modifier refreshers based on specialty.
- Use Software with Edit Checks: Many billing platforms now flag modifier mismatches.
4. Using Outdated Codes
What’s the Problem?
CPT, ICD-10-CM, and HCPCS codes are updated annually. Using expired or deleted codes leads to rejections.
Why It Happens:
- Manual coding without updates
- Lag in updating coding software
- Lack of awareness about changes
Consequences:
- Immediate claim denials
- Delays in revenue collection
- Incorrect reporting to regulatory agencies
Prevention Strategies:
- Subscribe to CMS and AMA Updates: Get alerts whenever code sets are updated.
- Mandatory Annual Training: Review major updates every January (CPT) and October (ICD).
- Audit for Legacy Codes: Use automated tools to detect outdated codes in claims.
5. Lack of Specificity in Diagnosis Coding
What’s the Problem?
Using non-specific diagnosis codes (e.g., unspecified abdominal pain) when a more specific option exists.
Why It Happens:
- Time constraints during documentation
- Coders not following up for clarification
- EHR drop-down menus defaulting to generic terms
Consequences:
- Lower reimbursements
- Denied or delayed claims
- Reduced quality scores in risk-based contracts
Prevention Strategies:
- Use Clinical Queries: Coders should request more information when documentation is vague.
- Physician Dashboards: Show providers their coding specificity metrics.
- Leverage Coding Tools: NLP tools can suggest higher-specificity codes based on notes.
6. Unbundling Services That Should Be Billed Together
What’s the Problem?
Unbundling occurs when multiple procedures that should be reported under a single code are billed separately.
Why It Happens:
- Misunderstanding NCCI (National Correct Coding Initiative) edits
- Attempt to increase reimbursement
- Lack of access to bundling guidelines
Consequences:
- Overbilling accusations
- Audits and penalties
- Payer recoupments
Prevention Strategies:
- NCCI Edit Software Integration: Make bundling/unbundling rules accessible to coders.
- Create Specialty-Based Coding Guidelines: Different specialties have different bundling risks.
- Internal Peer Reviews: Set up cross-checks among coding team members.
7. Errors in Telehealth Coding
What’s the Problem?
Telehealth coding requires specific modifiers, place-of-service (POS) codes, and documentation to be compliant.
Why It Happens:
- Constantly changing payer guidelines
- Incorrect use of modifiers (e.g., 95, GT)
- Failure to record technology type or consent
Consequences:
- Payer denials or reduced payments
- Compliance risks with CMS and commercial payers
Prevention Strategies:
- Maintain a Central Telehealth Policy Library: Include documentation requirements by payer.
- Regular Staff Training: Educate on POS codes, consent capture, and synchronous vs. asynchronous rules.
- Checklist for Telehealth Encounters: Helps ensure compliance before claim submission.
8. Incorrect Principal Diagnosis Assignment
What’s the Problem?
Especially in inpatient claims, the principal diagnosis should reflect the main reason for admission. Mistakes here can alter DRG assignment and impact revenue.
Why It Happens:
- Lack of understanding of sequencing rules
- Over-reliance on EHR prompts
- Poor communication between clinicians and coders
Consequences:
- Improper DRG payment
- Reduced accuracy in clinical analytics
- Potential audit exposure
Prevention Strategies:
- Case Reviews: Conduct random audits of inpatient coding assignments.
- Education on UHDDS Guidelines: Train staff on Uniform Hospital Discharge Data Set rules.
- Enhance Physician Notes: Encourage documenting the “why” behind admissions clearly.
9. Duplicate Billing
What’s the Problem?
Submitting the same claim more than once, whether intentional or accidental, is considered duplicate billing.
Why It Happens:
- Lack of coordination between departments
- Manual entry errors
- Incomplete claim status checks before re-submission
Consequences:
- Rejections or recoupments
- Potential fraud investigations
- Damage to payer-provider relationships
Prevention Strategies:
- Claim Scrubbing Tools: Automatically flag duplicate CPT/diagnosis pairings.
- Workflow Protocols: Train billing staff to verify claim status before resubmitting.
- Automated Reconciliation: Match charges to scheduled encounters and visit logs.
10. Not Adhering to Payer-Specific Rules
What’s the Problem?
Each payer—Medicare, Medicaid, Blue Cross, UnitedHealthcare, and others—has unique rules on billing, coding, and documentation.
Why It Happens:
- Teams assume coding guidelines are universal
- No centralized resource for payer policies
- Failure to review EOBs or denial letters
Consequences:
- Frequent denials
- Missed revenue opportunities
- Frustrated providers and patients
Prevention Strategies:
- Maintain a Payer Reference Manual: Document requirements for top 10 payers your organization works with.
- Weekly Payer Update Emails: Share policy changes, code requirements, or frequency edits.
- Analytics on Denial Trends: Use data to highlight payer-specific coding errors and train accordingly.
Bonus Tips for 2025 Coding Excellence
Invest in Smart Coding Technology
Artificial intelligence, predictive coding tools, and computer-assisted coding (CAC) platforms can dramatically improve speed and accuracy. However, they must be implemented alongside proper training and oversight.
Implement Ongoing Education
Medical coding is never “set it and forget it.” Subscribe to AAPC, AHIMA, CMS updates, and payer bulletins. Schedule monthly coding huddles to review changes and share learnings.
Empower Coders with Clinical Insight
Today’s coders are expected to understand more than just guidelines—they need clinical context. Encourage cross-training or invite providers to participate in coder education sessions.
Focus on Metrics That Matter
Track KPIs such as:
- Coding accuracy rate
- Denials due to coding
- Average turnaround time for coding queries
- DRG mismatch trends
these metrics can uncover systemic issues and guide training efforts.