Avoiding Billing Errors in Healthcare

A single source of truth to help your team prevent denied claims, fines, and rework

Anand went to an in-network medical facility for surgery on his wrist. The surgery was successful, the service was great, but the bill was surprising. Two months post-op, his bill included a few extra thousand dollars not covered by insurance – an out-of-pocket charge he was not anticipating.

The amount was significantly higher than what he’d been told to anticipate for out-of-pocket fees. The extra charge was for a member of the surgery team who was out-of-network. He’d been told by the provider, before the surgery, that everyone involved was in-network for his insurance plan.

When he was unable to pay, Anand’s bill was sent to collections. It took the help of a news outlet to review his insurance records and speak with the medical facility. It turned out there had been a coding error.

The physician’s assistant was in-network after all. And the medical facility said the bill was sent to collections because of a mistake caused by an isolated human error.¹

Anand’s situation is not unique. In many cases, the outcomes are worse with surprise bills of $30,000,² to upwards of hundreds of thousands. In 2018, more than half of Americans said they had encountered some version of Anand’s story when trying to get care. Because mistakes have become so prevalent, the No Surprises Act was signed into law in 2022. It protects people in group or individual health insurance plans from receiving unexpected bills from out-of-network providers who cared for them at in-network facilities (a system already in place for Medicaid and Medicare patients).²

This law helps to reshape medical billing,² but can’t account for all the ways mistakes can happen:

• variation across the industry
• constantly changing codes
• conflicting communication between insurers
• different contracts with employers
• higher demand on physicians

80% of American medical bills have some sort of error, resulting in billions in erroneous debt.¹ Consistent billing errors can disrupt providers’ operations, diverting time and resources away from patient care. Accurate and up-to-date medical billing and coding practices are essential for healthcare providers to maintain the right accreditations and receive reimbursement as well.

The biggest problem in healthcare

Former CEO of Cincinnati-based Mercy Health, Michael Connelly, says coding is the biggest problem in healthcare right now. It’s affecting doctors on the front lines, demanding more of their time, and competing with patient time.³

There is a higher demand on physicians today to see more patients, provide complex medical services, and complete detailed documentation efficiently. As critical as medical coding and billing are, there’s little time left for the process.⁴ Increased workloads create room for errors and less time focusing on patient care.

This is important because to generate the correct codes for billing, medical coders rely on accurate clinical notes provided by physicians and nurses. When notes aren’t accurate, or legible, it leads to delays or mistakes⁵ that create costly risks like:

• Lost revenue
• Legal investigations
• Potential exclusion from government programs like Medicare and Medicaid
• HIPAA violations

Improving efficiency

The most effective way to deal with inaccurate coding and billing is to create efficient processes and improve the tools employees use to follow them.

Every year, codes are added, changed, and deleted. And every quarter updates are issued.⁶ It’s easy to see how mistakes happen. In a constantly changing environment, you don’t want your staff guessing which policy is the most up to date. That’s how mistakes are made. Ongoing training for staff can help to eliminate the reoccurring issues that affect the accuracy of coding and billing. But how do you keep track of it all?

Create a single source of truth

Eliminate confusion and simplify processes for your entire team with a single place to store consistently updated and accurate information. Limit who can edit the documents so there will be no question about whether they’re up to date. Notify employees when the documents are updated and for critical updates, ask them to sign off on it or quiz them on what’s changed. You’ll reinforce the importance of the change and have the peace of mind that they’ve actually seen it.

Former Mercy CEO, Connelly, says “caregivers are leaving healthcare because of the massive headache medical coding causes.”Healthcare desperately needs simplicity as its primary focus.³ While some of the headache comes from too much variation across the industry,⁷ eliminating the guesswork for your staff can help reduce what’s in your control. 

And when your staff knows how to do their job, they’re more likely to stick around. Continuing training beyond onboarding and simplifying complicated procedures can help your employees feel confident in their work. With healthcare job openings reaching an all-time high at the end of 2022, organizations need effective ways to retain team members.⁸

More time for patient care

One of our clients provides person-centered, intensive outpatient therapy. They do this by contracting with clinicians to provide care, while our client provides offices and shared services to manage all back-office requirements.

Their clinicians can be confident that critical billing and regulatory procedures are consistently executed, so they’re free to focus on their clients’ recovery.

To get there, the team turned to Acadia to streamline procedures and avoid billing process issues from the start. Their employees now know they have one dedicated resource that is their single source of truth when they have questions. There’s no more guesswork between clinicians and back-office employees. And when there’s a change to a policy or procedure, they all receive an acknowledgement. If a policy needs reinforcement, it’s easy to send out a quiz to one employee or all.

With access to a single source of truth, our client’s clinicians save time. That time translates directly to time they can spend with their clients rather than on rework.

Their COO has called Acadia a victory for them. “Because every hour we save our clinicians becomes an additional therapy session. That’s more people in our community who are getting to see a top-notch, highly qualified clinician for an hour of therapy.”

The company is prospering and demand for their services is growing. In the past two years, they’ve opened five additional offices, allowing them to help more people.

They use Acadia to help open each new office as well. Each one comes with state and local regulatory requirements, licensing conditions, and general office needs to be met. Their operations leader uses a checklist in Acadia for each one – making sure all requirements are met and new office openings happen quickly and efficiently.

Rapid improvement is possible

Chasing the constantly changing codes and requirements using paper, email, and other traditional tools only leads to more confusion among your teams. There’s also no way to confirm if they’ve seen or understood the changes.

Don’t wait until the next batch of changes to help get your team on the same page. Let’s have a conversation today.

Sources:

1. Medical billing errors are common and costly. Here’s how to spot them before paying
2. How this law reshaped medical billing, and what challenges remain for patients
3. Coding ‘destroys everything’: Former Mercy Health CEO on where healthcare reform should start
4. A systematic review of outpatient billing practices
5. Who is responsible for billing and coding at a medical office?
6. Annual Changes to ICD-10-CM/PCS, CPT®, HCPCS, CDT® Codes
7. What are the front-end steps of revenue cycle management?
8. The 6 challenges facing health care in 2023 – and how to handle them