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Are Medical Billing Errors Reaching a New High?

April 7, 2016

Medical Billing Errors-1It’s not surprising that medical billing errors happen sometimes; after all, practices prepare and submit thousands of claims every year and human error is bound to be a factor. But just how bad is the problem for consumers? 

It depends on who you ask. According to a study by the American Medical Association, the error rate is just over 7 percent, 7.1 percent to be exact. While that’s still pretty high, especially if you are on the receiving end of a billing error, it doesn’t sound too terrible, right? 

Just How Bad Are Medical Billing Errors?

As it turns out, the AMA may be underestimating the scope of the problem—by an order of magnitude at least. A new study by NerdWallet, a consumer advocacy group focused on helping consumers better manage their money and navigate the financial landscape, suggests that closer to 50 percent of all Medicare claims contained medical billing errors, and these errors translated into billions of dollars in wrongful reimbursement and erroneous charges to patients. 

Here are some other eye-opening findings in the study:

  • Hospital billing errors resulted in overcharges of 26 percent on average in those bills that contained errors. 
  • Roughly two in three Americans have received medical bills that were significantly higher than what they expected in 2014. 
  • Medical debt is the largest category of consumer debt and an estimated 51 million people in the U.S. will have a medical bill turned over to a debt collection agency (that equates to one in five Americans).

Read More: 6 Key Steps of a Successful Medical Billing Process

  • One in every three dollars paid to a collection agency is related to medical debt. Medical debt held by collection agencies is three times larger than financial and credit card debt—combined.
  • Approximately 75 percent of consumers believe that health care practices should provide more transparency about the cost of care; further, they believe this information would help them make better decisions about their health care spending. 

The problem has become so bad, in fact, that a survey of 800 medium to large employers showed that nearly half (45 percent) offered patient advocacy services to help employees understand their health insurance benefits and health care costs. And services such as Medical Billing Advocates of America and CoPatient, organizations that review and attempt to reduce medical bills on behalf of patients, are seeing demand for their services soar. 

What Can Your Practice Do?

If you’re wondering if this is a problem that applies to your practice, chances are, it is, but you can (and should) do a thorough audit of your billing practices and identify the scope of the problem. This will also help you find trouble spots in your coding and billing processes that are causing your billing errors. 

Consider proactive transparency policies with your patients, including a clear explanation of what you will bill for each visit and procedure, what other bills they may receive as a result (lab fees, diagnostic imaging, pathologist or radiologist fees), and what they can expect insurance to pay. Have billing staff available to discuss charges, claims, and payment policies to any patient who has questions. 

For many practices, a full-service billing and coding agency is the ideal solution. Agencies such as M-Scribe use certified professional coding, documentation, and billing personnel to ensure bills accurately reflect the care provided and offer patients a dedicated customer service and support team who can go over patient bills, explain costs, and quickly resolve billing errors. In fact, M-Scribe has an award-winning patient support team that can helps patients understand and resolve billing questions, resulting in higher patient satisfaction and improved collections. 

Give us a call for a free consultation to discuss your billing processes and see how we can help you reduce medical billing errors. 

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