Consequences of Coding Errors

One of the largest causes of medical coding errors is due to inadequate medical documentation. Because of ICD-10, sets of more specific codes have been implemented and the CMS modify codes on a quarterly and annual basis.

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.