Medical Coding and Billing Errors – Innocent Mistake or Intentional Misrepresentation?


The complexities surrounding medical coding, billing, and submitting an “accurate” claim are a given. Those in the business of healthcare will affirm that keeping up with annual CPT, HCPCS, ICD-10 code revisions/updates, variations of health plans guidelines/policy instructions, numerous Medicare laws, regulations, and other related healthcare matters give rise to both – ongoing challenges and opportunities to the revenue cycle process. It also shines a spotlight on ensuring healthcare providers/suppliers are compliant with the submission of medical claims, have the necessary supporting documentation for services reported/billed, and receive appropriate reimbursement for billed services. There must be ongoing coordination, communications, and education to help ensure claims are routinely submitted accurately the first time. Refiling and rebilling claims due to medical and coding errors is inefficient and increases administrative expenses for all parties involved.

To initiate the claims filing process, it is necessary to obtain member information, demographics, type of insurance, and other data. Another layer involves medical coding/billing, capturing all services provided, and applying applicable associated charges. Those submitting the claim must determine whether services are performed by practitioners, hospitals, ASCs, imaging centers, DMEPOS suppliers, home health agencies, or a host of other provider types.

The extensive list of numbers below related to the thousands of code considerations and the necessary information required to complete health insurance claims means there must be a solid team of players to complete the required claim field elements for claims submission to health plans.

Selecting Services/Procedures

  • CPT Codes – over 10,000
  • HCPCS Codes – over 8,000
  • ICD-10-PCS Codes – over 87,000

Selecting Diagnosis(es) Codes

  • ICD-10-CM Codes – over 70,000

Other Types of Coding/Billing Information Needed

  • Modifiers – over 250
  • Revenue Codes – 176
  • Place of Service Codes – 51
  • MS-DRG Code – 740 DRG Categories
  • Date(s) of Service
  • Quantity Units of Service
  • Bill Type
  • Other Data

Claim Forms – Determine Type of Claim Form Used to Submit Healthcare Services

Form CMS-1500 (paper) – Electronic Equivalent 837P

  • Used to report/bill services by physicians, other qualified healthcare professionals, DMERCs, others
  • Contains 53 form locater (FL) fields

Form CMS-1450, aka UB-04 (paper) – Electronic Equivalent 837I

  • Used to report/bills services provided by hospitals – inpatient and outpatient, skilled nursing facilities, rehabilitation facilities, home health agencies, ASCs, others
  • Contains 81 FL fields

Claim Audits – Are They Important?

Most definitely! Claim audits are more important and effective than ever. Coding and billing errors occur due to the quantity/complexity of information, and specific details (“numbers”) need to be entered on the health insurance claim referenced above. Diligence is necessary. Common medical and billing errors include data entry, omission of information, incorrect insurance or patient information, no supporting medical documentation, incorrect code(s), and many others.

Government and private insurers continue to uncover medical billing errors resulting in substantial overpayments. Healthcare providers and suppliers deserve to be paid appropriately for the medical care/services furnished to patients. However, avoiding improper coding/billing practices alleviates innocent mistakes (abuse) or intentional misrepresentation (fraud). Without an assessment of proper coding, billing, and reimbursement, there is no stick to measure compliance effectiveness and ongoing process improvement.

Common Errors Identified in Medical Coding/Billing

In addition to getting all the selected numbers and data entry information accurate on the claim, considerations of multiple coding and billing guidelines must be applied. Some common coding errors include:

Unbundled Codes – Unbundling refers to using multiple CPT/HCPCS codes for the individual parts of the procedure, either due to misunderstanding or to increase payment. When a single code is available that captures payment for the component parts of a procedure, that is the applicable code to report/bill. Another example is the unbundling of routine hospital items/supplies which are considered part/partial to other reported/billed hospital service(s).

Upcoding – Examples: Routinely reporting the highest-level of evaluation-and-management (E/M) service code regardless of the actual condition the patient presents with. Always using the highest-level of E/M code due to being a “specialty practitioner” or billing for 30- or 60- minute face-to-face E/M visits when that amount of time is not spent with the patient and supported by medical record documentation. Coding for an excision of 2.5 cm skin lesion (11403) when documentation supports the lesion was really 1 cm. diameter (11401).

National Correct Coding Initiative (NCCI) Edits – The Centers for Medicare and Medicaid Services (CMS) developed NCCI edits to help ensure correct coding methods are followed to help avoid improper payments. These are automated prepayment edits that are reached by analyzing every pair of codes billed for the same patient on the same service date by the same provider to see if an edit exists in the NCCI. In some circumstances, it is appropriate to utilize a modifier to override the edit denial and in other cases, the direction is clear that no modifier may be used to override the edit denial.

Failure to Append Appropriate Modifier(s) or Misuse of Modifier(s) – Some codes, by definition, are a bilateral procedure, and as such, modifier 50, Bilateral Procedure is not necessary to add to the reported procedure code since it is already defined as a bilateral service. 

Inappropriate Use of Modifier 22 – Increased Procedural Services or Modifier 25 – Significant, Separately Identifiable E/M Service by the Same Practitioner on the Same Day of the Procedure/Other Service.  Depending on the modifier used,proper documentation must exist to explain why the procedure required more work than is typical/usual for the service or the service was indeed a separately identifiable E/M service from the other service(s) during the same encounter.  

Improper Reporting of Codes Defined by Time, Improper Reporting of Anesthesia Time, or Improper Reporting of Ambulance Miles. Lack of documentation to support the actual time spent providing the service(s), time spent providing anesthesia services, or ambulance mileage reported/billed on the claim(s).

ClaimDOC’s Auditing and Pricing of Claims

ClaimDOC’s approach to claims analyses is unique as processes are built for specific auditing and advocacy. Talented, certified healthcare professionals perform a comprehensive line-by-line claim review to uncover errors typically not caught by claim scrubbers and automation. Our audit team’s unique combination of healthcare background, health information, diverse skills, clinical expertise, and variety of perspectives result in critical thinking skills that automation cannot accomplish when coding/billing data reported on claims appears questionable. A commonsense approach is used to identify codes/services integral to other billed items/services, incorrect reporting of CPT, HCPCS, ICD-10-CM codes, misuse or lack of modifier usage, inaccurate information on the claim, duplication of services and other areas of concern.

We have uncovered numerous errors of improper reporting of quantity units, unbundling of services, misuse of modifiers, incorrect use of add-on codes, improper assignment of Covid-19 diagnosis, invalid diagnosis(es) on claims, incorrect bill type, improper billing of professional services on hospital claims and the list goes on. Our primary goal is to fairly price all services timely and accurately.

Coverage and benefit determinations are left to the third-party administrator (TPA).


At the end of the day, accurate coding and billing by healthcare providers assists with the proper reimbursement/payment for provided services, helps ensure quality compliance and minimizes risks.

On our side, ClaimDOC efficiently:

  • Audits and manages claims using more than merely software scrubbers/automation. Not all audits are equal.  We use an actual team of dedicated professionals/experts with an “eyes on” claims review approach.
  • Uses reference-based pricing (RBP) to achieve accurate and fair payment solutions for health plans.
  • Applies benchmark charges and costs nationally to negotiate fair and ethical payments.

Employers turn to us to establish fair reimbursement rates for health plans allowing them to save money and provide richer benefits to their employees. A win-win for everyone.