Error Minimization in Medical Billing Services is a Must for Bright Future

Every healthcare facility is equally important for the care delivery services they are providing. Within the facilities, we have two staff divisions that handle and manage the overall system. The first is the provider network and the nursing staff, which deal with patients directly. We can say that these personnel perform front-office tasks. Second, we have a back office team doing administrative tasks. Hence, they are the unseen supporters, ensuring the sustainability of practice with their silent roles. So, what do they exactly do for us? Well, they do various jobs for us, but here you must consider their medical billing services.

Let’s overview the current condition of medical billing in healthcare. It will give you an idea of how common medical billing errors are. And how they are influencing the healthcare business.

Check out the Global Medical Billing Outsourcing Market!

The Business Research Company's Medical Billing Outsourcing Global Market has provided its recent report. The report calls for a high level of error minimization in medical billing. According to Equifax’s audit report, every $10,000 bill contains an average error of $1,300.

The medical billing outsourcing market has grown from 13.56 billion in 2022 to $15.12 billion in 2023. This exponential growth took place at a CAGR of 11.5%. And we are expecting an even bigger CAGR of 12.0% in the coming future (CY 2027).

These simple statistics depict how much healthcare organizations are interested in medical billing outsourcing companies for their billing needs.

Errors in Medical Billing Services are Common.

Medical billing services play a prominent role in successful AR management. However, for different reasons, we observe problems in in-house medical billing and coding services. Any problems from the medical billing services side can adversely impact the facility’s finances. Therefore, we emphasize the error reduction policy the most.

Have you ever seen American medical bills? Massive 5, 6, or 7-figure earnings are possible with the right medical billing services! It's insane! And you'd think they'd better be accurate, right? But it is not happening in real practice. Check out the details below and estimate what is exactly happening!

Over 80% of Medical Bills Contain Errors!

Pat Palmer, CEO and founder of Medical Billing Advocates of America, commented about billing errors. He reported that they have found that 75% of medical bills have errors. The common billing error they depicted was overcharging. Undercharging was a rare case among them. The medical billing teams face difficulties handling bulk bills all at once. Most of the time, they make mistakes unconsciously. Then, they bear the result of their incompetence in the form of billing errors and claim denials. Let’s see it in more depth.

Diagnosis-Related Groups (DRGs) Billing Errors

DRGs are groups that intend to manage things fairly and standardize hospital payments. They do so by categorizing the patient based on their clinical conditions. Thereby, they attempt to streamline care and reduce the cost of treatment for diagnosis. Currently, we can observe such groups in Medicare systems. However, these DGRs often make coding mistakes. Usually, they appear due to simple oversights. Anyhow, upcoding is the most frequently occurring mistake. Upcoding is when the biller uses a higher severity code instead of the normal code. Such codes give them a chance to earn extra bucks. But it is unjust for patients to do so.

Confusion in In-patient and Out-patient Visits

Inpatient care, to put it simply, is when you spend the night at a hospital. It often costs more than outpatient care. And, yes, you got it, more money for the suppliers! The fact is, billing mistakes can occur, and outpatient care may be wrongly coded as inpatient care. Do you understand what that implies? Medical expenses soar out of control. However, this can be avoided if medical billing services become vigilant enough.

The Skilled Nursing Facilities Conundrum

SNFs contribute a lot to the delivery of care. However, their reputation has been damaged badly due to their fraudulent billing acts. It was 2018 when HHS and DOY recovered $47 million from their fraudulent practices.

Instead of using outcome-based payment models, our healthcare system still uses volume-based payment. The number of visits made by a patient affects SNF payments in part. This encourages prescribing and billing for more visits than are necessary from a medical standpoint. According to one estimate, up to 25% of SNF claims involve overcharges, which account for 15% of the net paid sum.

Higher Urge of Error Minimization in the Medical Billing Services for Good

Let's face it – medical coding errors can wreak havoc in the U.S. healthcare system. But fear not, because there's a solution! Clever claims and record reviews can curb overspending and reduce healthcare costs significantly. Due to difficulty in maintaining in-house billing, healthcare facilities employ outsourced services. However, the sustainability of medical billing outsourcing companies depends on the efficient billing they do. As long as they improve the quality of bills, they will be able to grow. The billing companies have employed modern IT solutions. Although modernized billing processes have facilitated the systems a lot, the progress is slow enough. But do not lose hope. Healthcare IT is devotedly working on developing AI-based billing software for better results. Also, medical billing services providers are implementing different strategies to cope with the issues.