Adequately and accurately documenting medical diagnoses and medical procedures before applying appropriate billing codes is essential to the success of a healthcare practice. Physicians need to proactively monitor and audit medical billing and insurance claims. Some common coding errors to be cognizant of include:

• Selecting the wrong procedure code
• Failing to link the diagnosis code to the reason for the office visit
• Billing for a nurse visit in place of or in addition to another service
• Using modifier codes incorrectly

Despite diligent monitoring, medical billing errors can happen. Resolve errors by immediately bringing the error to the attention of the provider. If the provider indicates that the error can be corrected, request documentation and follow up to be sure that it has. Also, if the provider has already billed the patient, follow up with the patient too. This approach may circumvent a complaint concerning improper billing and improve the physician-patient relationship.

Billing errors may be made in a healthcare provider’s favor resulting in overpayment. When overpayment occurs, prompt action must be taken. Consultation with experienced legal counsel is necessary for any practitioner encountering this situation. Both civil and criminal penalties can be imposed for failing to handle overpayment situations in a prompt and proper manner. Improperly received funds will need to be timely returned to avoid further inquiry and monetary penalties. The government has several statutes and regulations designed to protect the public from false claims and empower individuals to “blow the whistle” on fraudulent medical billing. Resolution may involve more than simply returning overpayments and so it is wise to consult legal counsel as soon as possible.

The risks associated with improper billing are vast, and may include loss of revenue, fraud allegations, sanctions, disciplinary action, exclusion from government programs and potentially criminal penalties. Physicians may consider hiring a management company to handle all aspects of medical coding and billing practices in an effort to improve accuracy and reduce risk.

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