What Are the Consequences of Inaccurate Coding and Incorrect Billing?

what are the consequences of inaccurate coding and incorrect billing

If you run a medical practice, you’ve probably wondered, “What are the consequences of inaccurate coding and incorrect billing?” With around 80% of medical bills containing errors, managing a healthcare company invites an opportunity for serious errors and the consequences that follow.

Thankfully, as the most preferred medical billing company in Florida, PracticeForces helps small healthcare organizations understand and avoid these mistakes. With this advice, you can drastically reduce the number and severity of errors and protect yourself, your employees, and your patients.

 

Financial Penalties

According to the American Medical Association, medical practices lose an average of 7% of their yearly revenue to denied claims, most of which result from things like incorrect CPT codes. You must prioritize working with qualified and meticulous coding specialists who rarely make mistakes.

However, the greatest penalties come from medical billing fraud, such as this case against the Florida hospital system. Focus on maintaining professional relationships with providers and avoid fraudulent, incorrect coding practices like assigning a higher cost to services than needed (called up-coding).

 

Legal Ramifications

In addition to the financial penalties, fraudulent billing can lead to prison time or a revocation of your business or medical practice license. Avoiding fraudulent billing practices offers the easiest way to prevent serious legal sanctions.

While small billing mistakes may have minor consequences, such as requiring an audit, they won’t result in life-altering consequences. Prevent small mistakes with tips like this advanced care planning billing guide and memorizing the best practices set forth by the American Medical Billing Association.

 

Damaged Reputation

If you still wonder, “What are the consequences of inaccurate coding and incorrect billing,” perhaps the most overlooked consequence comes from the damage to your reputation. Patients may blame you and start seeking treatment with a different healthcare provider.

Ultimately, this hurts your profits, and it can take several revenue cycles to repair the damage. To repair it faster, quickly fix mistakes, and allow patients to negotiate to show good faith. You can’t expect to never make a mistake but keep them infrequent and minor and fix them promptly. You can also outsource your medical billing to a reliable third-party contractor.

 

Decreased Care Quality

Dedicating time and money to fixing and investigating medical billing errors means you have fewer resources to provide a high level of care. Hiring highly qualified coding specialists and reducing the frequency of denied claims helps everyone involved and keeps the patient’s needs front and center.

 

Accreditation Loss

Using the incorrect code casts doubt on both the provider and the medical billing business and can lead to a loss of accreditation. Implement processes to cut down on minor errors and prevent fraud to keep the business fully operational.

 

Consult Florida’s Medical Billing Experts

When you run a healthcare organization, understanding “What are the consequences of inaccurate coding and incorrect billing?” helps you avoid mistakes. PracticeForces enables healthcare business owners to better understand the benefits of medical billing and coding services and avoid errors. Speak with a knowledgeable team member by calling (727) 202-5429.

Parul Garg, CEO and co-founder of PracticeForces, has significantly contributed to the growth of over 1,000 U.S. medical practices through her expertise in medical billing and coding since the company’s inception in 2003. With a background in Computer Science and an MBA in Human Resources, her leadership and AAPC-certified coding skills have been pivotal in managing the company’s operations effectively.

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