10 Common Medical Billing Errors
As healthcare costs continue to skyrocket, an escalated need exists for closer analysis of healthcare claims to identify egregious charges, improper medical coding and billing errors, double billing, duplicate billing, and associated improper claim payments.
In this Audit Spotlight, we highlight 10 key coding and billing errors frequently identified on healthcare claims. Ongoing monitoring/auditing of claims is a key element of an effective compliance program. Coding audits identify potential errors and discrepancies to pinpoint specific areas requiring improvement and helps ensure coding guidelines are consistently being followed.
- Incorrect billing of quantity units for drugs – On both types of claims, i.e., CMS-1500 claims and UB-04 claims the correct reporting and billing of quantity units is of utmost importance. Medications reported/billed with a “J” drug code always require associated quantity units of service and must correlate to the specific medication description and dosage/units defined by the “J” code and the medication and actual amount of drug administered.
- Billing professional services on the incorrect claim form – Many hospitals employ/contract with physicians/midlevel practitioners and handle the reporting and billing of these professional services. Typically, physician/midlevel practitioner services are reported/billed on a CMS-1500 claim/electronic equivalent. Hospitals often bill incorrectly for physician services on a UB-04 claim/electronic equivalent with the hospital outpatient or hospital inpatient charges. An exception is made for Critical Access Hospitals, which can elect to report/bill professional services on a CMS-1500 claim or UB-04 facility claim depending on the arrangements and agreed-upon procedures.
- Clinical laboratory tests reported/billed with modifier 26 – Modifier 26 is used to report a physician’s/practitioner’s professional services – interpretation and report of a diagnostic test. For example, modifier 26 is appropriate to report/bill with diagnostic imaging services (i.e., radiology, CT, MRI) and pathology services. It is not, however, appropriate to report/bill with clinical laboratory testing codes.
- Missing diagnosis codes not supporting services billed – Medical diagnosis codes must be included on the healthcare claim to support the medical necessity of all services reported/billed. Billing the diagnosis of a sore throat can support an office visit code and a strep test. However, this diagnosis code alone does not support, for example, other services on the claim – chest X-ray, glucose and thyroid lab test. There must be corresponding medical diagnosis codes for all items/services reported/billed on the claim.
- Submitting claims with invalid/deleted codes – CPT/HCPCS codes are updated frequently, and the use of outdated codes can lead to billing claim rejections and reimbursement delays. It is key to stay updated with the latest coding information from the American Medical Association (CPT) and Medicare (HCPCS). The CMS HCPCS quarterly update is available effective July 2025.
- Unbundling of service – Reporting multiple codes for procedures that should be combined under a single code. This practice can lead to overbilling, improper payments and compliance issues.
- Incorrect modifiers – Modifiers can impact pricing and/or they can be for informational purposes only. Billing with the appropriate modifiers provides additional information about a service or procedure. Using an incorrect modifier or omitting modifiers can lead to improper reimbursement or claim denials.
- Incorrect dates of service – Using incorrect dates of service on the claim can impact insurance eligibility and cause reimbursement errors or delays. Processes should be in place to confirm/validate all service dates prior to claim submission.
- Duplicate billing – Duplicate billing results when the same service is billed more than once. Duplicate billing can lead to payment discrepancies affecting patients and provider credibility. Systems/software and billing staff should flag duplicate entries to prevent and reduce duplicate billing.
- Incomplete or inaccurate upcoding of services. Assigning codes that reflect more severe diagnoses or more intensive procedures than were actually performed can result in higher/improper reimbursements and compliance concerns.
The Takeaway
The above examples highlight specific types of healthcare claim errors reported/billed by healthcare providers. Incorrect billing and coding causes losses, including wrong copayment amounts collected from patients, inaccurate claims data, premium increases to cover losses from fraud/abuse and raises costs for patients and employers. Ethical responsibility requires healthcare providers to have ongoing and effective coding/billing compliance programs as well as maintaining price transparency and fairness in billing practices.
Given the volume of healthcare claims that are reported/billed daily by providers/suppliers, medical bill errors and egregious charges are alarmingly common and lead to abuse, waste and fraud.
When an individual receives a healthcare bill that appears questionable/inappropriate, an inquiry to the provider and/or health plan should be made to obtain an explanation of the services and corresponding charges.
Our goal at ClaimDOC is to use benchmark charges and costs nationally to negotiate fair and ethical payments. Our high-quality and expert review of claims identifies and prevents improper medical claim payments and maximizes long-term cost savings opportunities. Employers turn to us seeking to establish fair reimbursement rates for their plans allowing them to save money and provide richer benefits to their employees. A win-win for everyone.
Background
ClaimDOC’s comprehensive line-by-line review of claims uncovers errors that basic claim repricing and auto-adjudication does not catch, leading to greater savings for health plans and its plan members. Our audit team analyzes all types of healthcare claims for a variety of potential concerns including excessive usual and customary charges, duplication of claims, double billing of services, incorrect coding, incorrect units, unbundling of services and many others. Our claims review is not intended to impact care decisions or medical practice.