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How Improper Medical Coding Can Hurt Your Practice

Medical Bill Codes And Spreadsheet Data

One of the easiest ways for a medical practice to find itself in hot water is through medical coding errors. While some wrong codes are deliberate attempts to squeeze extra money from private or public insurers, many coding errors are simply mistakes that can arise from overworked or under-trained staff members. Even if you have the best of intentions, medical coding errors can create significant hassles and headaches for your practice and tarnish your relationships with insurance carriers and patients. Below, our seasoned California healthcare law and compliance attorney discusses several of the potential consequences of medical coding errors.

Reimbursement Delays and Denials

If an insurance company identifies coding errors, it might choose to deny claims entirely. They could cite billing errors, missing information, or other problems. A claim denial will include an explanation with a reason for the denial, and you may have the right to appeal the denial. In such a case, payment will be extremely delayed.

Even if your claim is not entirely denied, the insurance company may take additional time to process and pay out on a claim if an error is identified. They may require corrections and/or clarifying information before paying out. Delayed payments are always frustrating, and they put a drain on already-stressed resources. It is best to get it right the first time.

Increased Processing Time

Likewise, even if you catch an error after you submit, it will take additional time and resources to correct the error. Multiple submissions can delay the claims reimbursement process even further, and raise eyebrows at the insurance company.

Insurance Provider Audits

If your insurer has reason to believe that you have been submitting false or incorrect claims, they might want to conduct a full-fledged audit of your billing practices. They may do a deep dive through your coding processes and find that you actually owe them back pay for overpaid claims, or discover other problems.

Fraud and Abuse Charges

Possibly the worst consequence of medical coding errors would be to face allegations of fraud or abuse. Upcoding, unbundling, duplicate billing, or billing for services not provided can lead to heavy regulatory fines and other serious consequences for your practice. Your practice may even face criminal charges, especially if you were submitting erroneous codes to Medicare or other public insurers, or if you have had significant coding errors for a long period.

Even without criminal fines, civil penalties for violating the False Claims Act can be extensive (as high as triple the amount of damages sustained by the government as a result of the false claims). If the problem is extensive, it can seriously disrupt a healthcare practice’s business, not to mention affect the practice’s relationships and reputation.

Considered Advice and Effective Representation for Your California Medical Practice

For assistance with matters of healthcare regulatory compliance, auditing, fraud defense, employment disputes, mergers and acquisitions, business disputes, licensing, or any other healthcare legal issue, contact the Law Offices of Art Kalantar in Los Angeles or California statewide at 310-773-0001.

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