The High Cost of Claim Errors: How Mistakes Can Impact Your Practice

Medical claim errors can significantly affect patients and practices. We share how you and your patients are impacted by billing mistakes, and what steps you can take to avoid these costly errors.

The healthcare industry is a critical sector that demands the utmost care and attention to detail. Even seemingly minor mistakes can have significant financial and, more importantly, human consequences for healthcare facilities. Therefore, it’s essential to establish and maintain protocols to prevent claim errors that affect patients and practices.

Accurate medical claims are essential in generating a final bill for patients who receive medical services, whether they pay out of pocket or through insurance. It is imperative to emphasize the importance of accuracy in medical claims processing. Errors in medical claims require the work to be redone multiple times, and charges that should have been included in the claim may be left out. According to MGMA, it costs $25 on average to re-submit an insurance claim. In some cases, healthcare professionals may provide medical procedures without charging patients or may overcharge a patient if the billing and coding department cannot get things right.

The Cost of Claim Errors

Preventing claim errors - A doctor filling out a patient form using a tablet device.

Medical claim errors can result in significant financial and operational costs for healthcare providers. While it is apparent that claim errors can cause procedures to be left off the final bill or have procedures that are billed incorrectly, other consequences also exist. These consequences include:

  • A buildup of open claims as each one takes longer to process.
  • Patient dissatisfaction and frustration.
  • Increased labor costs to reduce errors.
  • Higher staff turnover due to inadequate training.
  • Widespread reputational damage resulting from negative word-of-mouth information about a provider's practices.

Minimizing claim errors is essential for healthcare providers to avoid these negative outcomes. Investing in better processes or services can be an effective strategy to reduce errors as well as improve operational efficiency.

It is fair to say that putting in new processes or adding new services will cost the company additional money. However, those cost increases pale compared to the cost of excessive claim errors. The cost is far better than continuously making the same types of mistakes.

Consider this example: earlier this year, Blue Cross Blue Shield experienced reputational damage as a result of an e-mail error. This led to inaccurate claims information sent to its customers. Upon receiving these notifications, some of the recipients became apprehensive, mistaking the incident for a phishing scam. However, it all boiled down to an e-mail error committed by someone within the organization. The company has done its best to rectify the mistake, but some damage was already done.

Types of Claim Errors

Female nurses discussing patient billing at work - preventing costly claim errors.

The number of errors that can occur on a single claim is surprising. In fact, research shows that 80% of medical bills in the US contain errors. Here, recommends that healthcare facilities take proactive measures to minimize the number of claim errors they make:

“The repercussions of errors on the healthcare claims processing workflow can be major and wide-ranging. It slows the revenue cycle, interrupts cash flow, consumes staff hours, creates frustration for staff and patients, and, in the worst cases, sacrifices revenue. Errors are a perennial—maybe even inevitable—problem but understanding some common reasons behind these mistakes can help.”

With this understanding in mind, what are some of the common types of claims errors that are seen?

Incorrect Patient Information

There could be an issue with the patient's name, DOB, insurance ID number, or more. Today, one of the most common patient information errors has to do with the sex of the patient. Those who identify as anything other than the biological sex they were assigned at birth should be identified by their preferred sexual identification for claims purposes.

Incorrect Insurance Information

A simple error such as inputting the wrong policy number, the wrong address of the insurer, or something along these lines can cause the wrong inputs in the insurance field. Therefore, it is easy to make mistakes in this area. That is something you should pay very close attention to when filing a claim.

Mismatched Diagnosis/Treatment Codes

Your medical claim will be denied by your insurer if the codes used to identify your diagnosis and treatment are inconsistent. It's like trying to fit a square peg into a round hole – you can't receive treatment for pneumonia if you have a diagnosis of a broken leg.

Duplicate Billing

Believe it or not, it is easier to submit duplicate bills for the same procedure than you might think. When a claim is entered multiple times for the same procedure, it will be quickly flagged as an error, and the claim will be denied.

These are just a handful of the errors that medical coders make every day. Cutting down on the number and frequency of errors should be a primary goal of every healthcare facility.

Preventing Claim Errors

Male doctor using a tablet device to explain medical treatment to his female patient.

The sooner that a business works on reducing these errors, the less financial risk exists. It is all about minimizing the dangers to the bottom line.

BillFlash RCM Services works hand-in-hand with our clients to provide them with the assistance they need to cut down on claim errors. When outsourcing the work of insurance claims and patient billing to us, you can begin to rest easier knowing that you have a team working on this. We also directly provide the following services:

  • Pre-claim services
  • Claim processing
  • Patient billing
  • Payment verification
  • Patient payments
  • Patient collections
  • Analytics and reporting

In fact, our top priority is to provide transparent and reliable billing services to our clients, and we go to great lengths to ensure that we meet their requirements. Our satisfied clients have made the switch from slow and error-prone billing management methods to our comprehensive end-to-end revenue cycle management services. See for yourself why we are the trusted choice for your billing needs. Schedule a demo with us today!

Like this article?

Share on Facebook
Share on X (formerly Twitter)
Share on Linkedin
Share on Pinterest