Medical billing is a complex, critical component of the healthcare system. Coding accuracy ensures proper reimbursement and compliance. A simple mistake in the CPT codes could have a domino effect on the life of a healthcare provider, from patient satisfaction to regulatory compliance. It eats our revenue if we dare to make any mistakes in the code. Not only will it slow down our payment, it will also increase our compliance in denying claims. This is the reason why medical coding compliance is highly favoured in practices.
In this article we’ve focused on inaccurate CPT codes affecting patient billing and compliance, how coding errors impact an organisation, and risk mitigation strategies.
What Are CPT Codes and Why Are They Important?
Every provider documents and bills for each service delivered to every patient using CPT (Current Procedural Terminology) codes. AMA manages these codes and makes them available worldwide so that every insurance company and healthcare facility understands the context of every medical service rendered to a health insurance beneficiary or to any patient of a privately run medical facility. Coding (accurate coding) is the first and major step of a health facility’s revenue cycle management procedure. The revenues incurred after providing medical care will be determined by how the healthcare facility manages the ‘payment’ for such care.
An example of that is… procedure-specific codes, such as those in CPT [Current Procedural Terminology – code sets specific to endocrinology billing and coding], which are derived from procedures that may be beneficial but come with problems similar to that misbilling one: denials, underpayments, and even regulatory audits if the wrong code is used.
The Impact of Incorrect CPT Codes on Patient Billing
Delayed Reimbursement and Denials
Another is delayed or denied reimbursement. Mistakes in coding lead to claim rejections from payers, which then cause substantial delays as payments are awaited. Not only do these create delays in cash flow but also create an administrative labor cost due to review, correction and resubmittal. For example, a CO 9 denial refers to a missing or invalid item in the claim, which is often due to a coding error. A denied claim for use of the wrong CPT code must be appealed, which delays payment and generates labour costs.
Financial Burden on Patients
Poorly selected CPT codes can also cause patients to be billed incorrectly, which means they have to pay more. For example, if a CPT code that is incorrectly higher than that for a procedure has been entered into the claims, then patients will be charged for services they did not receive or erroneously charged a higher level that reflects more services being provided than were. If patients do not review their bills carefully or notice incomplete services on their claims, such as being billed for services in a room that differs from the actual room, then they may become frustrated, create an issue with their provider, and potentially never return for care. It may also prompt patients to spend more time than necessary calling claims companies and resolving billing problems.
Increased Administrative Costs
Healthcare organisations are often forced to waste time and money reworking or correcting input and billing errors Many medical billing departments are forced to dedicate hours to ‘rework’, or laboriously tracking down the right information and resubmitting claims. Increasing coding error rates put time and resources toward correcting mistakes that could be used for important tasks such as improving patient care and experiences or enhancing operational workflows and efficiency.
Patient Flow Disruptions
If you are in an urgent care center, where increasing patient throughput could be key to success, a $500 charge for the wrong code could cause a major backlog. If the billing is slow and claims are not getting out the door, this has an emanating effect on the flow of the practice. If, for example, an insurer didn’t want to pay for a patient’s billing, it could mean their medical record has to go back to the provider, who now has to talk with the billing department about the issue. This, again, slows the administrative process and impacts the delivery of patient care.
Compliance Risks Associated with Incorrect CPT Codes
Regulatory Audits
Inaccurate CPT codes mainly raise issues of compliance, which could lead to extra scrutiny from regulators. Inaccurate coding might be flagged as part of a CPT audit, but it can quickly escalate into a full-scale audit of a practice’s healthcare symptoms and treatments, including – among other issues – charges to government patients. Such regulatory audits are not only time-consuming but also costly, for instance through penalties in the case of non-compliance. In some egregious cases of repeat errors (or fraud, such as through upcoding), patients could be sanctioned with fines, exclusion from government insurance programs, and loss of reputation.
Non-Compliance with Industry Standards
Coding errors can also result in patients’ records becoming non-compliant with industry standards issued by organisations such as the Centers for Medicare and Medicaid Services (CMS) and other insurance companies. These same standards, however, constantly evolve and change, such that institutions must stay abreast of their changes. A failure to bring claims into compliance with changing standards can cause organisations to fall out of compliance with industry standards, introducing the increased risk of audits and penalties that ultimately affect the bottom line.
Legal Consequences
More concerningly, when coding errors are wrongly considered fraudulent or negligent, organisations and healthcare revenue cycle providers can face significant legal repercussions, including litigation and reputational harm. Coding inaccuracies meant for reimbursement purposes such as upcoding – coding at a higher rate than appropriate or billing for services not rendered – can lead to allegations of fraud and initiate formal government agency investigations.
Mitigating the Impact of Incorrect CPT Codes
This means that to stem the harmful effects of inaccurate CPT code diagnosis, healthcare organisations should properly monitor coding decision-making and take compliance matters into their own hands. Following are practical steps you can take to mitigate these risks:
Regular CPT Code Audits
Regularly performing CPT audits is a reliable way to secure coding accuracy and compliance. Over time, audits can inform the organisation about common billing errors and trends, and provide coder education opportunities. They can assist in ensuring the organisation’s coding practices are up to date with the latest legislation, correct billing errors before claims are billed, and avoid compliance risks.
Staff Training and Education
However, education needs to be sustained so that coding staff writes proper codes according to updated editions of the manual and rules from payers. Sustained training in coding can reduce error and increase the particularity of charges, which maintains accurate billing and reduces the potential for fraud. Education can be an important prevention strategy for error reduction.
Leveraging Healthcare Audit Services
Connecting with healthcare audit services enables healthcare organisations to have access to coding advisors who can analyze their billing and coding procedures. Healthcare audit services provide an external perspective and assess whether coding processes are in line with the industry payer’s rules as well as government or industry-based coding guidelines. They can highlight the areas where the coding accuracy can be enhanced and can provide actionable steps.
Implementing Robust Billing Software
You can reduce coding errors by implementing medical billing software with built-in coding validation that highlights discrepancies, makes suggestions for appropriate valid codes, alerts the coder to correct the errors, and ensures all the necessary documentation has been entered into the claim before it can be submitted. The more automation you can build into the billing interface of your medical practice, the fewer coding errors will occur and the fewer claim denials you’ll face.
Conclusion
Free mistakes imply patient billing problems, noncompliance, and deficiencies across the spectrum of operations for healthcare providers. From delayed reimbursements, patient dissatisfaction, regulatory audits or even medical malpractice to non-payment and risks to providers’ careers – the implications of medical coding errors are significant. Medical coding compliance, regular CPT code audits, and staff education all should be core efforts of healthcare providers so that they can avoid coding errors and mitigate these risks well in advance. Beyond smoothing revenue cycle, mitigations of possible medical coding errors will help providers stay in compliance, keep their reputation pristine, and help ensure seamless patient billing processes.