Every year, private and government insurance providers deny hundreds and thousands of claims stating fraudulent or abusive coding errors. According to the American Medical Association (AMA), up to 12% of the claims are denied due to coding errors, and this causes additional administrative burdens on the healthcare providers regularly.

If you are a medical coding services company working for clients in the United States, there is so much to know about the coding regulations there. Coding errors can lead to monetary loss due to improper payments and, worse, legal hassles that can bring down the stability of your client’s business.

Types of medical coding errors

There are two types of medical coding errors identified by the payers – fraudulent and abusive.

Fraudulent errors occur when the payer assumes the healthcare provider misrepresented codes and overcharged the original bill.

Abusive errors are unintentional errors. These occur due to genuine coding mistakes that can happen when claims are processed.

The result of both these errors is denied claims. The former error, however, can also lead to legal complications and massive fines. That’s why it is safer to finetune your coding processes, regularly conduct audits, and reduce the coding error rate.

Every medical coding services company must know this list of the top five medical coding errors to avoid when you bill for inpatient services.

1. Up-coding and down-coding
The most critical medical coding error that happens while billing for inpatient services is upcoding. Upcoding occurs when the coder codes for more exhaustive or complex procedures than what was actually offered to the patient.

Here is an example. Suppose a doctor spent 15 minutes with a patient for a basic checkup. However, the coder used codes that point to extensive checkups and charged the payer more. If such errors happen regularly, Medicare, Medicaid, and other private health insurance companies may file a fraudulent case against the healthcare provider.

Every medical coding services company should equally be aware of down-coding. This is the opposite of up-coding. Here, even though a more comprehensive or exhaustive treatment was offered to the patient, the coder downplays the service and bills much lower than what the service provider is eligible for. While doing this won’t lead to legal tussles, this will bring down the total revenues generated.

2. Unbundling codes
According to experts in the industry, another problem that a medical coding services company can get into is bundling and unbundling issues.

In many cases, a single code may be available to capture more than one procedure or service offered. In that case, this code must be used instead of adding individual codes for each procedure.

When you use individual codes, this is called unbundling. Unbundling may increase the overall charges captured and isn’t legally allowed. Even if your coders are doing this unintentionally, this may also lead to legal issues.

3. Inappropriate or lack of use of modifiers
This is one of the common coding errors that coders can make, leading to financial and legal challenges for its clients.

Modifiers are used when there is a slight change in the procedure followed and when the service provider has to put in more effort than what’s considered usual.

There are two ways using modifiers could become problematic. The coders miss using modifiers in places needed and end up bringing down the total chargeable value.

In contrast, the coders can add modifiers in inappropriate places, leading to fraudulent or abusive errors, which can affect the clients. All medical coding services companies must be aware of modifiers and the right ways to use them.

4. Using unlisted codes without backing documentation
Unlisted CPT codes are often used when the service provider uses new technology or processes that aren’t approved by the FDA yet. Unlisted services can still be reimbursed but must be backed by the right documentation.

If the client has mentioned using such new technology or process, the medical coding services company must use unlisted codes only when it has the below supportive documentation.

• A clear description of the process or procedure
• Clear explanation of why the process or procedure was needed
• Whether the procedure was part of other services or independently done
• The circumstances that required the process or procedure to be performed
• The time taken to offer the service and the number of times it was performed
If you are a medical coding services company, make sure you train your coders to use unlisted codes the right way.

5. Overuse of modifier 22

Modifier 22 is one of the most commonly used modifiers by coders all over the world. Modifier 22 denotes increased procedural services. It means that a procedure usually done for all patients now requires extra effort, time, technical strengths, and capability and hence is charged more.

Here is a classic example. An intestinal surgery is done on a morbidly obese person, and due to their excess fat tissues, the surgery process gets more complex and time-consuming. As a result, modifier 22 is used after the regular code is generated.

All codes with this modifier will need to be backed by supportive documents. There is an additional step of reviewing the documents by the payer and approving or rejecting the additional payments.

All medical coding services companies need to have seamless interaction with their clients to ensure they have all supportive documentation when this modifier is used. They also need to be confident about using it. Overusing this modifier can lead to rejections, denials, and legal disputes.

Takeaways

If you are a medical coding services company handling inpatient services for your clients, it is very important to be aware of these possible five coding errors that can bring down the effectiveness of the codes generated, increase the rates of denials and rejections, and also increase the risk of legal disputed.

Quintessence understands the severity of incorrect or inaccurate coding on our clients’ businesses, and that is why our coders all undergo extensive training before joining our team. All our coders also undergo periodic L&D sessions to upgrade their skills and stay on top of their games.

Our internal auditing team picks up coding errors and nips them in the bud before they affect the quality of the codes sent out.

If you are a healthcare provider looking for a trusted and efficient medical coding services company to handle your coding processes, please get in touch with our internal team for a consultation.