MARYLAND LOCAL HEALTH DEPARTMENT – BILLING MANUAL 2016

10 Common Medical Billing Mistakes That Cause Claim Denials

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Medical coding and billing involve complex processes that can differ depending on the patient, insurer
and procedure. Even the most diligent financial services departments experience claim denials, but
knowing the most common mistakes can help you take steps to avoid them.

Here, we discuss the first five most common medical coding and billing mistakes that cause claim denials
so you can avoid them in your business:

1. Claim is not specific enough.

Each diagnosis must be coded with the highest specificity for that code (the maximum number
of digits for the code must be used).

Remember, ICD-10 codes now include anatomical location including laterality (right or left side)
in the code descriptor.

2. Claim is missing information.

Any missing information may be cause for a denial, but the most common missing items are:

 Date of accident
 Date of medical emergency
 Date of onset

Be sure to scrutinize all claims for missed fields and required supporting documentation.

3. Claim not filed on time (aka: Timely Filing)

If a proper claim is submitted, but it’s not within the timing window, it may result in a denial. It
is recommended that you check with your Payers regarding their filing deadlines.

Medicare providers should be aware that the Affordable Care Act reduced the claims-
submittal period from between 15 and 27 months down to 12 months. The start date for a
Medicare claim is the date the service is provided to the patient or the “From” date on the claim
form. The claim must be received by the appropriate Medicare claims processing contractor
prior to the end date (exactly one calendar year after the start date). If a claim is sent prior to
the end date but received after, it will be denied.

It is vital that you understand the process in addressing timely issues. The understanding of
what to submit for supporting documentation to receive reimbursement is critical to
appealing timely issues. You will not be reimbursed for the services denied timely if you do not
understand how to handle them. Commercial and Medicare have different guidelines that are
considered timely filing.

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Per Section 6404 of the Patient Protection and Affordable Care Act (ACA), Medicare fee-for-
service (FFS) claims for services furnished on or after January 1, 2010, must be filed within one
calendar year after the date of service. Claims with dates of service January 1, 2010, and later
received more than one calendar year (12 months) beyond the date of service will be denied
and/or rejected as being past the timely filing deadline.

Other Key Points of Medicare Change Request 7080:

 For institutional claims that include span dates of service (i.e., a “From”
and “Through” date span on the claim), the “Through” date on the claim will be used to
determine the date of service for claims filing timeliness.

 For professional claims (CMS-1500 Form and 837P) submitted by physicians and other
suppliers that include span dates of service, the line item “From” date will be used to
determine the date of service and filing timeliness. (This includes supplies and rental
items). BE AWARE: If a line item “From” date is not timely, but the “To” date is timely,
Medicare contractors will split the line item and deny untimely services as not timely
filed.

4. Incorrect patient identifier information.

To avoid this error, make sure the patient’s name is spelled correctly, the date of birth and sex
are accurate, the correct insurance payer is entered and the policy number is valid. It’s also a
good idea to check whether or not the claim requires a group number, the patient’s relationship
to the insured is accurate, and the diagnosis code matches the procedure performed. Finally,
make sure the primary insurance is listed as such in the case of multiple insurances.

5. Coding issues.

If you are using an outdated codebook or your coder or biller enters the wrong code, your claim
could be denied.

The use of outdated coding books either CPT (Current Procedural Terminology), ICD-10
(International Classification of Diseases) or (Healthcare Common Procedure Coding System)
HCPCS and/or super bills will result in loss of revenue.

Insufficient documentation occurs when documentation is inadequate to support payment for

the services billed or when a specific required documentation element is missing. When coding
and submitting claims it is imperative that what is documented is billed. If it is not documented,
carriers consider the service(s) were not performed. However, denials related to insufficient
documentation, no documentation, and medical necessities are more complicated because
providers must be involved in improving the process. Coders unequivocally play a key role in
denials avoidance, and they are best suited to proactively identify process deficiencies by using
a proactive not reactive approach.

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MARYLAND LOCAL HEALTH DEPARTMENT – BILLING MANUAL 2016

The follow ruling is important to understand how carriers look at errors in billing. Striving to be
proactive not reactive to any concerns and wanting to be sure that practices do not ever fall into
the violation of 18 U.S.C. § 1347. Under that code section, it is a felony to knowingly defraud any
health benefit program or to fraudulently receive payment from any health benefit program,
and/or under 18 U.S.C. § 1035, which makes it a felony to willfully make fraudulent statements
or representations in connection with the receipt of payments for health care benefits. This is
nothing that a practice would ever knowingly do but not using correct billing, procedures and
protocols could put you at risk. The practice should take no comfort in claiming lack of
knowledge or that they were mistaken about the law should audits occur.

The statutes governing health care fraud do not provide leniency for a provider’s lack of
knowledge therefore protocols should be in place for your office to make sure should you have
an audit that you have mitigated your risk and liability.

6. Duplicate billing.

Many times, a duplicate bill is the result of human error. However, duplicate bills can result from
resubmitting a claim instead of a follow up or canceling a procedure or test but not removing it
from the patient account. All claims processing systems contains criteria to evaluate all claims
received for potential duplication.

The claims are placed into two categories: exact duplicate or suspect duplicate. Due to the
nature of the service, some claims may only appear to be duplicates. Proper coding of the
service with the applicable condition codes or modifiers will identify the claim as a separate
payable service, not a duplicate. Exact duplicate claims will contain the following:

o HIC number
o Provider number
o From date of service
o Through date of service
o Type of service
o Procedure code
o Place of service
o Billed amount

7. Upcoding or unbundling.

Upcoding refers to intentionally using a higher-paying code on a claim to receive a higher

reimbursement or billing a covered Medicare service in place of a not-covered service.
Unbundling refers to submitting bills piecemeal to maximize reimbursement for tests or
procedures that are required to be billed together.

Upcoding refers to a provider’s use of CPT Codes to bill a health insurance payer (private,
Medicaid or Medicare) for providing a higher-paying service than was performed. It is critical to

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MARYLAND LOCAL HEALTH DEPARTMENT – BILLING MANUAL 2016

understand that upcoding is illegal. It is considered fraudulent practice used by providers who
bill for additional services not documented and/or performed.

Another common example of improper coding called “unbundling,” also known as

“fragmentation.” Some health care providers seeking to increase profits will “unbundle” the
tests and/or procedures and bill separately for each component of the group, which totals more
than the special reimbursement rates. We must be aware that doing this by adding modifiers
does not make this practice acceptable or legal.

Medicare reimburses surgeries based on a package of care (global surgery package). When
unbundling for the purpose of receiving additional payments although may seem profitable is
illegal. It is very important to understand the usage of modifiers and there purpose in the role of
coding. Surgeries are designated in the CMS Medicare Physician Fee Schedule Database
(MPFSDB) with 0, 10, or 90 global days.

8. Further documentation requested to support medical necessity.

Sometimes a payer requires medical records before it can adjudicate a claim. This may include
the patient’s medical history, physical reports, physician consultation reports, discharge
summaries, radiology reports and/or operative reports.

Medicare and private payers recognize medical necessity as a deciding factor for claims payment
and processing. Each payer might have its own definition but the outcome is the same. The best
way to stay within the bounds of medical necessity is to think of each element of the history and
physical exam as a separate procedure performed only if there is a clear medical reason to do
so. The key is always to have documentation to support level of service should records be
requested. No documentation equals no services performed. According to section 1862(a)(1)(A)
of the Social Security Act, Medicare will not cover services that “are not reasonable and
necessary for the diagnosis or treatment of illness or injury or to improve the functioning of a
malformed body member.”

9. Referral or prior authorization required.

Some payers require you to obtain prior authorization or a referral prior to certain services or
procedures being performed. When there is a referral or prior authorization that is sometimes
required, it is important to understand the difference.

The primary care physician, who sends the patient to another healthcare provider for treatment
or tests, issues a referral.

The payer to perform the necessary service(s) issues a prior authorization. It is understood by
carriers that obtaining prior authorization is still not a guarantee of payment.

The submitted claim must still be;

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MARYLAND LOCAL HEALTH DEPARTMENT – BILLING MANUAL 2016

1) Supported by medical necessity,

2) Filed within the timely filing requirements, and

3) Filed by the provider mentioned in the referral or authorization.

10. Services not covered/coverage terminated.

Because insurance information can change at any time, it’s critical to verify eligibility every time
services are provided. Make sure the patient’s coverage has not been terminated, their
maximum benefit has not been met (for things like physical therapy and behavioral health) and
the service you’re providing is covered by their plan. Understanding the patients plan and the
services you are providing is important.

With some plans, services have a cap although if following correct guidelines and supporting
documentation these services will still be covered. Some examples of these are physical therapy,
speech or occupational therapy and the use of correct modifiers.

Coverage can change therefore it is important to verify and receive updated coverage from your
patients. Ask them each time – they will forget to tell you. Again, a proactive approach is
needed.

It is also very important to verify before doing procedures and providing services requiring prior
authorization under the terms of a member’s plan. If prior authorization is required then it
needs to be supplied when filing the claim.

RS & F Healthcare Advisors 130 ADMIRAL COCHRANE DRIVE  SUITE 102  ANNAPOLIS, MARYLAND 21401  PHONE 410.897.9888  FAX 410.897.9889