How Often Do Medical Bills Contain Errors?


Each year, medical claims errors result in incorrect payments of upwards of ten billion dollars. It goes without saying that medical bills are often expensive enough when they are correct. The problem is that most people don’t even realize they are looking at billing errors when reviewing their bills. Unfortunately, these errors happen a lot more often than you may think.


80% of all medical bills contain errors.


As reported by Matt Moneypenny of Ohio's Etactics, Inc., the vast majority of medical bills contain mistakes. This statistic comes courtesy of Becker’s Hospital Review. The (we just have to mention) aptly-named Moneypenny acknowledges that not all studies see it that way. He reports that an analysis conducted by the University of Minnesota professor, Stephan Parente, found that the number lands somewhere between 30% and 40%. The study, however, goes back to 2012.


“Believe it or not, healthcare was much different back then,” writes Moneypenny, “More organizations were still transitioning towards going paperless. Even then, though, some experts believed that number to be closer to 80%. That’s since been the belief of many.”


John Hansbrough of California's The LBL Group backs up Moneypenny’s contention. He cites a Medical Billing Advocates of America study that found errors on three out of four medical bills they review.


“While patients are frequently overcharged, hospitals and providers are very good about never undercharging,” writes Hansbrough, “It’s unreasonable to review each and every claim submitted, given the sheer volume of them, and looking at claims alone isn’t likely to be effective at reducing waste and errors. One cause behind the frequency of medical billing errors is the complex billing system we have in the U.S. healthcare system.”


One of the most common and pervasive billing errors is upcoding.


Hansbrough points out that some coding errors are simply clerical and a result of oversight. However, upcoding is the process by which one attempts to increase the reimbursement to a provider or hospital.


“Hospitals employ specialized coding specialists to ostensibly make sure it gets paid appropriately for the care it delivers,” Hansbrough explains, “But in practice, they work to make the hospital as much as possible based on the codes available. So if a coder indicates heart failure instead of acute systolic heart failure with a slightly different ICD-9 code, the provider can charge thousands of dollars more.”


Nearly 50% of all Medicare claims contain errors.


Moneypenny cites NerdWallet as the source for this statistic. He underscores the fact that a chief objective of Medicare is to help older, retired citizens so that they no longer have to worry about having health insurance. Having a 50/50 chance that your medical bill will be wrong, however, isn’t exactly comforting.


“Since Medicare is health insurance run by the government, it’s naturally more complex,” Moneypenny explains, “However, what’s most important is their review process. Private organizations usually review 100% of the claims in order to ensure accuracy. Medicare, however, reviews between 0.5% and 5% at a time. Thus, that means that leaves 95% to 99.5% of Medicare claims paid without review.”


It’s important to be able to locate and correct medical billing errors. Of course, it would be best to avoid them altogether. At Allegiant Experts, our team of skilled auditors is ready to help you better understand the medical record, abstract medical codes and compliance procedures in order to maintain correct coding policies. For more information, please don’t hesitate to call us at 407-217-5831 or email us at info@allegiantexperts.com.

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