Challenges and Solutions in Medical Billing in the Healthcare Industry

Four in five U.S. medical bills contain at least minor mistakes — costing the nation $68 billion annually in unnecessary healthcare spending by doctors and patients alike, according to the results of analysis performed by Medliminal Healthcare Solutions (MHS) 


Mistakes in billing have become the rule and not the exception for American consumers, said Jim Napoli, CEO of MHS an organization that helps patients find and fix those medical billing errors.


California Actions to Diminish Billing Mistakes

With the purpose of downsizing inaccuracies in billing for private insurers, the state of California enacted Assembly Bill 72 on July 1st, 2017 known as the “balance billing law”. The new legislation applies to non-emergency services and it protects patients against surprise medical bills from out-of-network providers, such as a hospital, lab or imaging center, even if you were seen by an out-of-network provider.  


But the law does not require that bills be written in clear, concise language, making the task of deciphering medical bills a task only trained specialists can do. The article published by Conexia Inc in October 17  mentions the most recent statements from The Medical Billing Association about the growing need for medical billing specialists over the years to come.



Why the Medical Billing Process is so Complex


Per the American Medical Billing Association explanation, the medical billing process is an interaction between a healthcare provider, a medical biller, and the insurance company (payer). The entirety of this interaction is known as the billing cycle and sometimes referred to as Revenue Cycle Management


The billing system includes medical coding reports that indicate the diagnosis and treatment, to which prices are applied accordingly. Medical billers are encouraged to become certified by taking an exam, such as the Certified Professional Coder as governed by the American Academy of Professional Coders. (AAPC)


The ICD is the International Classification of Diseases and it defines the universe of diseases, disorders, injuries and other health conditions, listed in a comprehensive, hierarchical fashion.


The US only recently upgraded to the more complex ICD-10 Diagnosis code set which is more closely aligned to identifying the source or cause for a disease or condition which can be key for tracking population health trends. Therefore, the selection of the correct diagnosis code is best optimized by the involvement of a trained certified professional coder. If a conflicting ICD-10 diagnosis code is detected by the payer’s front end edit when the claim is submitted then that claim could be denied which would require additional appeals resulting in delayed or loss of income for the provider.


Similarly, the CPT (Current Procedural Terminology) is a coding system that offers doctors a uniform process for coding medical procedures. The CPT descriptive terms and identifying codes currently serve a wide variety of important functions. This system of terminology is the most widely accepted medical nomenclature used to report medical procedures and services under public and private health insurance programs.


CPT is also used for administrative management purposes such as claims processing and developing guidelines for medical care review.


Next comes the Healthcare Common Procedure Coding System (HCPCS) which is divided into two principal subsystems, referred to as level I and level II of the HCPCS.


  1. Level I of the HCPCS is comprised of Current Procedural Terminology (CPT-4), a numeric ‘s coding system maintained by the American Medical Association (AMA). The CPT-4 is a uniform coding system consisting of descriptive terms and identifying codes that are used primarily to identify medical services and procedures furnished by physicians and other healthcare professionals. These health care professionals use the CPT-4 to identify services and procedures for which they bill public or private health insurance programs. 
  2. Level II of the HCPCS is a standardized coding system that is used primarily to identify products, supplies, and services not included in the CPT-4 codes, such as ambulance services and durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS). Medicare and other insurers cover a variety of services, supplies, and equipment that are not identified by CPT-4 codes, for this reason, the level II HCPCS codes were established in order to allow submission of those claims for these items.


For Dental billing, there is the Code on Dental Procedures and Nomenclature (CDT). The purpose of the CDT Code is to achieve uniformity, consistency and specificity in accurately documenting dental treatment.


The entire medical or dental billing life cycle can take anywhere from several days to several months to be completed.  It can also require several interactions between the provider and the payer before full adjudication is reached. The relationship between a healthcare provider > medical biller > and insurance company is comparable to a service vendor > collections intermediary > payer, respectively.


As explained above, the bills and Explanation of Benefits (EOB) that patients are used to receiving in most cases are written with numerical codes rather than treatment descriptions. Medicare and a few carriers do provide short treatment definitions in their EOBs, however, these are written in a complex medical terminology.  Medical abbreviations are often impossible to understand for patients even if they requested an itemized bill showing actual details of care and treatment.


Even with the assistance of an itemized bill,  confused patients end up calling their provider´s billing representatives who end-up spending considerable amounts of time helping them understand the details of their bills. Thus billing reps have the extra task of becoming interpreters for frustrated patients.



Most Common Mistakes in Medical Bills to Watch Out:  

Cost Shifting: Cost shifting occurs when a hospital or other health-care provider charges an insured patient more than it does an uninsured patient for the same procedure or service. Those with health insurance, in effect, pay for the financial loss hospitals incur when they provide services to those without insurance.  


Duplicate charges or Double Billing: This occurs when a provider attempts to bill an insurance company or a patient for the same treatment twice. For instance, when you visit your family doctor and report a  persistent cold, fever and muscle pain to get treatment, during the same visit you ask what you should do about your lower back pain. The family doctor gave you treatment for the symptoms and referred you to a specialist for the back pain. Always make sure you were not billed twice for a service or procedure. Request an itemized bill to prevent this from happening.


Canceled tests or procedures: If you get charged for test or procedures that were canceled, collect all the necessary documents to prove that you did not receive such tests and call the provider’s office to clear up the question. The charges can also be disputed through your insurance carrier.
Upcoding charge: It refers to a practice in which a provider bills a health insurance payer (whether private, Medicaid or Medicare) uses a CPT code for a more expensive service that was performed. For instance, a hospital could fraudulently inflate a patient’s claim to one that represents a more complex procedure or diagnosis, leading to a higher medical bill. 



Conexia offers healthcare software solutions can prevent the above-mentioned problems. Through a real-time at the point-of-care service, we provide accuracy, speed and ensure better health outcomes for patients. The billing process does not have to take months or days, with pre-arranged contracts, the process will take minutes.



Here is how we do it

The solutions offered by our experts are customized to each client. For example, a contract is agreed upon between a  payer and a provider which contains pre-negotiated fees for all CPT procedure codes. The contract is then entered into the system. Therefore, when the patient arrives at the provider’s office eligibility is instantly confirmed because the payer and the provider are electronically connected.  


Meanwhile, the provider gets instant access through a secure portal to the patient’s records which includes demographic data, diagnosed risk factors, current medications and recent tests results. The provider then enters a code for diagnosis and procedure, the medical treatment request is instantly processed via the interface, which uses business rules to adjudicate the transaction in real-time according to all details worked out on the contract.


Coding mistakes and double billing are greatly reduced because everything goes through the platform that pulls data from the agreements entered. Cost shifting can be avoided as well if the Conexia solution is involved in the billing process for self-paid patients. Per business rules guidelines entered into the platform, financial disparity between patients can be minimalized.


For patients covered by either a government-sponsored plan or a managed care contract, the Conexia solution works with the values entered in the contract previously agreed upon by the payer and provider. For instance, the system has the necessary information embedded so that through integration with the payer’s systems the latter can generate the invoice online in real time.


As an additional benefit, patients can be made aware of their financial responsibility and providers can know precisely what their reimbursement will be for the service.


To conclude, most of the activities that take place during the traditional billing process (fee schedule application, utilization review, coding validation, reconciliation with pre-authorization) have already been completed. Payment of invoices becomes prompt and simple avoiding potential billing mistakes.


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