Inaccurate billing and coding are one of the few factors responsible for causing such a potential revenue loss to healthcare facilities that they are irreparably damaged and could never financially recover themselves. Healthcare providers put their financial stability at risk when they submit false claims. This not only leads to accusations of medical fraud and abuse but also fines and penalties from the government. Within the healthcare operations and revenue cycle management, billing and coding accuracy is paramount.
In this blog, we will discuss in detail the financial, clinical, legal, and administrative implications arising from inaccurate billing and coding in healthcare. We will also emphasize the risks such as legal consequences, financial losses, reputational damage, and unreliable patient-provider relationships.
By reading this article, healthcare providers can significantly minimize the negative impacts of inaccurate billing and coding and ensure overall better patient care.
Consequences of Inaccurate Billing and Coding
Inaccurate billing and coding lead to serious complications of fraud and abuse according to the False Claims Act (FCA). Healthcare frauds include unbundling, upcoding of serious, and deceiving the insurer in any manner. Intentionally, submitting false claims creates severe illegal implications that must be combated properly.
Financial and Legal Implications
Inaccurate billing and coding and unethical billing practices in the US healthcare system can result in huge revenue losses and penalties for healthcare providers. Submitting false claims to the government can lead to bulky fines and even threaten the financial stability of a healthcare facility. Penalties under the False Claims Act (FCA) can be severe, with the potential to recover up to three times the amount of damages incurred by the government.
A 2018 American Medical Association (AMA) study found that approximately 7% of a physician’s revenue is lost because of Medical Billing errors. These errors can result in coding violations. Other billing errors that can lead to denied claims, overpayments, or underpayments include duplicated billing and unbundling of services.
Legal Consequences in Point
Apart from facing heavy financial loss, legal consequences arising from inaccurate coding and billing are also severe. Violating the Federal Civil False Claims Act results in tarnishing healthcare providers’ reputations, imprisonment, and damaging their patients’ trust.
Inaccurate coding and billing can lead to serious legal consequences for healthcare providers. For instance, in 2018, a hospital in Florida paid $85 million to settle a lawsuit alleging fraudulent billing and Stark Law violations related to provider referrals. One more example is a Texas-based healthcare facility consisting of fifteen healthcare providers who agreed to pay $2.83 million in 2020 to settle False Claims Act Allegations related to inaccurate billing and upcoding.
Loss of Patient Trust and Reputation
When providers are found guilty of fraud and abuse in medical coding, their reputations are damaged irreparably. This can create feelings of distrust among patients which is necessary for the continued success of a healthcare organization. Patients may go elsewhere for care, resulting in a decline in revenue and patient volume.
The reputational damage of a healthcare provider results in the loss of patients’ trust, referrals, and overall revenue. In 2019, a survey by the Kaiser Family Foundation showing Medical Billing error statistics is an eye-opener for healthcare providers, 67% of respondents expressed concerns about unexpected medical bills, with 55% saying that they had lost their trust in healthcare providers due to Medical Billing errors. Regulatory sanctions, negative press coverage, and word-of-mouth can all damage the public image. Once the reputation of a healthcare provider is irreparably damaged, it becomes difficult to attract and retain patients.
Potential Audits and Investigation
Healthcare providers involved in inaccurate billing and coding can be subjected to audits and investigations. These can be costly, time-consuming, and disruptive to normal operations. Inquiries and audits can also lead to further legal consequences and financial penalties.
Strained Provider-Patient Relationship
Inaccurate billing and coding can create friction between healthcare providers and patients. Incorrectly billed patients may become frustrated and lose faith in healthcare providers, potentially leading them to seek care elsewhere, and damaging professional relationships.
Incorrect billing and inaccurate coding can lead to disputes between patients and healthcare providers. Patients who are incorrectly billed may become frustrated and lose faith in their healthcare providers, damaging the professional relationship and potentially leading them to seek care elsewhere.
Impact on Quality Care
It potentially diverts the attention of healthcare providers if they start focusing on addressing medical billing and coding errors as it requires high-standard infrastructure facilities and highly qualified staff. If healthcare providers start providing accurate billing and coding services, they might largely compromise on the quality of care they provide to patients. On the other hand, inaccurate billing and coding services have far-reaching consequences for healthcare facilities which include financial losses, loss of reputation, legal matters, potential audits and investigations, compromised quality of care, and strained provider-patient relationships.
Loss of Accreditation
When a patient is coded inaccurately, it raises questions about the credibility of healthcare practice, physicians, and coders. For instance, when there is no correlation between the diagnosis and treatment provided, it can raise concerns about the authenticity of the parties concerned.
Resultantly, the coder, biller, and healthcare provider are brought to inspection for the errors made. You might have heard an often-repeated quote, what are the consequences of inaccurate coding and billing?
Inaccurate coding and billing lead to serious legal, reputational, and financial consequences for your healthcare facility, the most feasible option to avoid these complexities is to outsource your Medical Billing and coding services to Pro Medical Billing Solutions for accurate, transparent, and efficient billing services.
Effects on Medical Research
It has been found in various studies that around 80% of medical bills have errors. If delved deeper into the consequences of inaccurate billing and coding, it directly affects medical research, for example, the whole data collected becomes useless when patients are wrongly coded. Thus, inaccurate billing and coding negatively impact the overall trends and patterns in medical research.
Negative Impacts on Healthcare Policy
Healthcare policy is largely an important aspect of the US healthcare system. The system would have collapsed and the well-being of the masses not possible, had there been no smooth-functioning and transparent healthcare system. It is important to take into serious consideration the accuracy of billing and coding as inaccurate billing and coding negatively impact healthcare policy. Healthcare facilities must abide by certain regulatory policies in every healthcare practice. For example, regulations, laws, and actions against fraudulent and scam activities. False billing and coding negatively impact the healthcare policy of delivering overall quality care to patients.
Industry-Best Practices to Overcome Inaccurate Billing and Coding
Healthcare facilities must prioritize ensuring accurate billing and coding that promotes efficient and accurate processes in healthcare. Based on years of experience in this industry, we have discovered some of the most productive strategies to help healthcare facilities prevent medical fraud, abuse, and the negative consequences of billing errors:
- Keep educating and training staff on the ever-evolving coding and billing practices such as ICD-10 and ICD-11, regulations, and updates to ensure that your team is fully equipped with the latest billing and coding.
- Invest in the latest billing and coding EHR software and PMS, that automatically highlight inconsistencies and errors. This helps healthcare providers to correct mistakes.
- Routinely conducting internal audits enable providers to rectify errors before it is too late and they become more significant problems.
- Implement clear record-keeping and documentation practices to maintain accurate patient records, which is vital for accurate billing and coding.
- Maintaining open and transparent communication channels with insurance payers helps rectify coding and billing discrepancies. This develops cooperative relationships and prevents delays or denials in reimbursement.
- Fostering teamwork and collaboration among healthcare providers allows for a more comprehensive approach to ensure accurate billing and coding, leading to the identification of potential errors.
- Implement a patient-centric approach to ensure trust and transparency between patients and their healthcare providers.
- It is worth suggesting to consistently improve and evaluate billing and coding practices such as updating procedures or investing in technology to make the billing and coding process transparent.
Healthcare providers can effectively overcome the challenges of inaccurate billing and coding by adopting these practices. By doing so, they can help prevent medical fraud, abuse, and financial penalties while promoting the overall quality of care and financial penalties.
Importance of Accurate Billing and Coding in Healthcare
There is no denying the reality that, alongside providing exceptional healthcare services, it is equally important for a healthcare facility to have a well-organized mechanism in place to ensure efficient, accurate, and transparent billing and coding services. It is also a fact that accurate billing and coding drive financial stability and sustainability in your healthcare practice. The major benefits of accurate billing and coding include patient protection, valuable insights to make data-driven decisions for better financial success, financial protection, and stability.
Conclusion
Studies conducted to find discrepancies in Medical Billing, found 80% of medical bills have errors. Inaccurate billing and coding directly affect medical research which causes counterproductive impacts on patients, coders, billers, and healthcare providers. For healthcare facilities to stay ahead in the industry, must prioritize accurate billing and coding to avoid financial, clinical, legal, and reputational consequences.
If you are looking to outsource your Medical Billing and coding services to ensure you get real-time error checking, advanced automation, up-to-date coding guidelines, claims scrubbing, advanced analytics, integration with EHR/EMR systems, audit trail, and elimination of DRG coding errors. The most productive option is outsourcing your Medical Billing and coding services to Pro Medical Billing Solutions which offers the most efficient, accurate, and transparent services.
We have highly skilled billing and coding experts to arrest revenue leakages, safeguard reputation, ensure financial stability, and enhance patient satisfaction. This will ultimately lead to a more efficient healthcare system and improved quality of care.
FAQs
Describe the impact of inaccurate coding on the patient and healthcare facility.
Inaccurate billing and coding can lead to delayed payments, revenue loss, insurance denials, financial penalties, legal actions, and damage to the healthcare provider’s reputation. It may also cause patient dissatisfaction and harm compliance with regulatory standards.
How do billing and coding errors affect healthcare reimbursement?
Inaccurate billing and coding can result in claims being denied or reimbursed at incorrect amounts. This delays payment and may require resubmission or correction of claims, leading to cash flow problems for healthcare providers.
What impact can inaccurate billing and coding have on patients?
Patients may be overcharged or billed incorrectly for services they did not receive, leading to confusion, frustration, and potential financial hardship. In some cases, inaccurate billing may delay access to necessary care or result in the wrong treatments being covered.
Can inaccurate billing and coding lead to legal consequences for healthcare providers?
Yes, inaccurate billing and coding can lead to legal consequences, such as fraud investigations, fines, and sanctions by government agencies like Medicare or private insurers. Repeated or intentional errors may result in serious legal actions against the healthcare provider.
How does inaccurate coding affect a healthcare organization’s reputation?
Persistent billing and coding mistakes can damage a healthcare organization’s reputation, leading to loss of patient trust, negative reviews, and a decline in patient retention. A damaged reputation can impact future business and partnerships.
What are the compliance risks associated with inaccurate billing and coding?
Inaccurate billing and coding can violate healthcare compliance regulations such as the False Claims Act and HIPAA. These violations can lead to audits, penalties, and potentially even exclusion from participating in government programs like Medicare or Medicaid.
How does Pro Medical Billing Solutions manage Medical Billing and coding Services?
Pro Medical Billing Solutions excels in efficiently managing billing and coding services by leveraging advanced technology, industry expertise, and a highly trained team. With a deep understanding of medical codes, payer requirements, and regulatory standards, they ensure accurate and timely claim submissions, minimize errors, and reduce revenue loss.