Avoiding Malpractice in Medical Billing

Hey all, this is Loralee Kapp, Solutions Manager with Managed Outsource Solutions. Today I want to go over how you can avoid malpractice in medical billing.

Medical malpractice occurs when a hospital, physician or other health care professional fails to maintain a proper standard of care and causes injury to a patient due to negligence. Negligence can result from errors in diagnosis, treatment, aftercare, or health management. In medical billing, malpractice refers to unethical and fraudulent billing practices. Errors can occur in every phase of the medical billing process, which can end up being labelled as unethical medical billing practices. An experienced medical billing company such as Managed Outsource Solutions will take care to avoid mistakes in the claim submission. As professional coders and billing staff, we are well aware that even small mistakes can result in financial losses for the patient and provider, and put the healthcare organizations at risk of legal action.

01:03 So, What is Malpractice in Medical Billing?

Although physicians are committed to providing quality care and billing correctly for their services. Unfortunately, errors are common in both areas. Errors in medical billing fall under the category of fraud, but most facilities are not making these mistakes consciously. Whether they are the result of human error or fraudulent practices, flawed medical bills cost patients, insurers, and even healthcare providers, as they often lead to claim denials that delay the payment and affect cash flow. Errors also can expose providers to criminal and civil liability. Malpractices in medical billing are listed under two categories: fraud and abuse.

01:53 Misrepresentation of clinical information

Medicare and commercial insurance companies consider the following as misrepresentation of clinical information or fraud:

• Knowingly billing for a service at a level of complexity higher than the services actually provided or documented in the medical record
• Knowingly billing for services not furnished, supplies not provided, or both, including falsifying records to show delivery of such items and
• Knowingly ordering medically unnecessary items or services for patients as well as
• Billing for appointments that patients fail to keep

02:28 Examples of abuse

The following are examples of abuse:

• Billing for unnecessary medical services
• Charging excessively for services or supplies
• Misusing codes on a claim, such as upcoding or unbundling codes

Upcoding is when a provider assigns an inaccurate billing code to the medical procedure or treatment to increase reimbursement.

02:49 Worrying trends for malpractice in medical billing

The worrying Trends for Malpractice in Medical Billing –

The following statistics indicate the extent of the problem:

• The Department of Justice recovered over $2.2 billion from False Claims Act Cases in the fiscal year 2020
• Medical Billing Advocates of America reported that three out of four claims they review have errors

A report from the AMA Journal of Ethics notes that:

• Upcoding and fraud costs more than $100 billion annually and can result in unnecessary procedures and prescriptions.
• In 2016, CMS spent $1.1 trillion on health coverage for 145 million Americans, and of this, $95 billion constituted improper payments connected to abuse or fraud.
• The FBI estimates that fraudulent billing constitutes 3% to 10% of the total health spending, contributing to inefficiency, high health care costs, and waste.
• Almost 50% of all Medicare claims contain errors.

04:03 How can we prevent or minimize the risk of medical billing/coding errors?

In order to prevent malpractice in billing, healthcare providers should be vigilant to avoid the following:

• First, inadvertently upcoding and undercoding – upcoding is billing using codes for services that were not received by the patient, while undercoding is not capturing all the work performed
• Second, not using the discounted negotiated rate when billing a patient
• Billing and providing services that are not covered by the patient’s insurance
• Next is, incorrectly reporting a diagnosis and billing medically unnecessary services
• Duplicate billing or billing for services more than once including unbundling – billing multiple CPT codes for the individual parts of the procedure
• And last, billing services performed by an improperly supervised or under-qualified employee.

The often-used observation in malpractice litigation is: “If you didn’t document it, it’s the same as if it didn’t happen.” Physicians should maintain accurate and complete medical records and document all services provided. Claims should be supported by the proper documentation that proves that the services were actually provided, and were billed at the level to which they were provided and are medically necessary. Payers determine that claims have insufficient documentation errors when the medical documentation submitted is inadequate to support payment for the services billed.

05:42 How MOS can help?

Practitioners can rely on medical billing outsourcing companies such as Managed Outsource Solutions to manage their revenue cycle. To avoid inadvertent billing errors that can end up being construed as fraud one medical malpractice, you should make sure to partner with an expert. A reliable, HIPAA compliant medical billing company would have a medical billing and coding team that can help you translate the care you deliver into billable services using the correct CPT, ICD-10, and HCPCS codes, while maintaining compliance with the ever-evolving industry trends and insurance regulations. Partnering with a reliable medical billing and coding company will allow you to focus on your patients instead of worrying about practice management tasks like coding, and billing and claims submissions.