Incorrect coding, or miscoding, is likely for any medical practice that does not implement ongoing CPT code training for their medical coders. It is important to understand the consequences of these coding errors and it may be a wise investment to consider outsourcing medical coding to an experienced service provider.

Coding Errors Impact Patient Care

It is the foundation of every practice to provide quality patient care. Inaccurate medical coding can interrupt that goal, leading to frustration and confusion and a potential breakdown of the relationship you have built with valued patients. Even though the consequences of incorrect coding rarely falls onto a patient, it does happen, and it is the most important consequence to try to prevent.

Failure to code correctly could directly impact a patient’s treatment.

A great example of this would be using an incorrect diagnostic code. Codes have slight variances between the specificity of a diagnosis. Inaccurate coding of the specifics during diagnosis could result in improper patient care at another practice, or for a particular service. A missing 2-digit modifier for a knee injury could result in having an MRI study conducted on the wrong knee. Or, imagine an incorrect diagnosis code causing an obstetrician to withhold pains medicine during a woman’s pregnancy. This would be an extreme case, but altogether terrifying and harmful for the patient.

If circumstances similar to the examples above have occurred in your practice, it may be time to consider outsourced medical coding in order to improve the accuracy of codes and prevent these serious mistakes from affecting your patients.

Outsourcing also frees up a great deal of time, allowing practitioners more time with patients. (Did you know in-house medical coding costs more? Outsource!)

Coding Errors Delay or Prevent Reimbursement

Medical coding is the life-blood of a practice. That is how the services you provide are transformed into billable revenue. Failure to provide correct coding can cause these payments to be delayed, denied, or limited. MEREM Healthcare Solutions has found that an alarming majority of claims are rejected or denied upon initial submission. The reimbursement for denied claims depends on a practice’s efforts for correcting and resubmitting claim denials.

A miscoded procedure’s reimbursement has the potential to differ by up to $15,000. Delayed reimbursements are also costly, as they are unexpected. A build-up of delayed reimbursements can cause a backup of paperwork, stress on your staff, overlooked coding errors, and even more incorrect coding to be filed resulting in loss of revenue for your practice.

This back up of denials due to coding errors requires focused efforts to catch up on claim denial and improve your revenue cycle. The healthcare revenue cycle/reimbursement cycle is a very particular machine.  All aspects need to work together just right and at the right time or the system breaks down.

Coding Errors May Lead to Fraud and Abuse Fines

As you can see, incorrect coding causes poor patient care and trouble with reimbursements, but what happens to those responsible? Practices and providers who have a history of coding mistakes may face fines and or federal penalties for fraud or abuse.

The False Claims Act (FCA) is the enforcement tool used for false claims. The consequences could be a monetary penalty or a legal issue if the claim is named fraudulent. To prove fraud occurred rather than abuse, the upcoding or miscoding of an event must occur over time and across a large number of patients.

We recommend all practices be proactive in monitoring their claim denials by setting Industry Benchmark Goals for our clients and by offering a complete Revenue Cycle Audit.

Understanding the Outcome of Outsourced Medical Coding

Medical coding can be an excessive amount of work, and small errors can cause significant harm. When practices outsource their medical coding, fewer mistakes are made, better care is given to patients, and billing cycles run smoothly.

Are your ready to improve your revenue cycle while avoiding the consequences of coding errors? Contact MEREM Health today to discuss outsourcing your medical coding.

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Coding services are the life-blood of your practice. That is how the services you provide are transformed into billable revenue. It takes a knowledgeable and experienced coding staff to maximize your billed charges while maintaining strict compliance with CMS and CCI guidelines.

Coders are trained to identify noncompliance and fraud. Part of a coder’s job is to have sound knowledge in detecting ambiguous or suspicious documentation that could lead to fraud as a false claim if not detected before being submitted to insurance and being paid.

Fraud, in regard to medical coding, is when a false claim misrepresenting the facts is intentionally submitted to insurance in order to receive payment.

Examples of Financial Fraud are:

• Billing for procedures that were never done
• Knowingly billing for services at a different level than what was performed
• Falsifying information in the medical record to satisfy the medical necessity

“You can’t code what is not there” – Meredith Tibbs, Medical Coder at MEREM Healthcare Solutions

Abuse happens when patients are treated with services that are not medically necessary

Examples of Financial Abuse are:

• Billing for medical services that are unnecessary
• Upcoding and Unbundling
• Overcharging for supplies and services

Common terms of Fraud and Abuse in the coding world are:

Upcoding:

Reporting a higher level of service than what is supported in the dictation

Unbundling:

Reporting more CPT (procedure) codes than necessary to increase payment

• Some higher paying procedure codes include smaller procedures in their code descriptions, so you can’t code both. You would only bill the one code that includes both procedures in the description.
• It is very important for a coder to be familiar with these codes and stay updated when these change because they frequently do change and update these codes.

Medical Necessity:

• The doctor must have a legitimate medical reason to perform tests and procedures
• There are certain diagnosis deemed necessary for medical necessity attached to certain procedures. These have to be documented, you can’t make these up to satisfy the medical necessity

It is VERY important as a coder to be knowledgeable and confident in their field, so they are able to detect any potential risks that could negatively impact the facility and/or physician they work for as well as educate the people around them that don’t know.

“Staying up to date through compliance training either on their own or through their organization is of the utmost importance. Coders work too hard to earn their certifications and, in this field, honesty is ALWAYS the best policy.” -Meredith Tibbs, Medical Coder, MEREM Healthcare Solutions

Auditing can provide areas for improvement for your coding staff. Even a well-trained staff must be checked, therefore every practice should have an audit performed annually. An audit can recognize under coding, bad unbundling habits, and code overuse. Coding staff will then be able to bill appropriately for documented procedures.

MEREM Health specializes in auditing and can provide education, consultation, reports, and recommendations for improvement. The feedback and recommendations provided by our external auditors are valuable to the improvement of each practice.

Contact Merem Health today to find out how our auditing services will provide support for your practice!  

MEREM Healthcare Solutions is a Birmingham, AL-based company that has been providing exceptional medical billing and coding services to physician practices and ambulatory surgical centers since 2008.  We pride ourselves on not just maintaining, but exceeding, the level of accountability, communication, and customer service that is valued in traditional, on-site billing departments.

Please check out our other blog posts, or contact us to learn more.

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