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Coding Mistakes that Trigger Medical Claims Audits (and How to Avoid Them)


If there's one thing that keeps healthcare administrators and physicians up at night, it's the thought of facing a medical claims audit. While audits serve an important purpose in detecting fraudulent or erroneous billing practices, they can severely impact provider revenue and disrupt workflow. Many audits are triggered by preventable coding mistakes.

By sharpening coding knowledge, updating policies, and adding extra layers of auditing, providers can minimize errors and hopefully, interactions with auditors. This article outlines some common CPT, HCPCS Level II, and ICD-10 coding mistakes and how your practice can tighten up its workflow. 

Unbundling Coding Errors

One of the biggest coding mistakes that invites unwanted scrutiny during a medical claim audit is unbundling services. Unbundling involves reporting each component of a procedure as if it was performed independently, instead of using an all-inclusive code. Not only is this perceived as upcoding, but it is considered fraudulent.

Carefully review bundled service codes - identified with parenthetical statements in code text or symbols. Ensure coders understand how to appropriately use bundled codes per payer guidelines. Implement nag screens in chargemaster systems that alert the coder if an unbundled code is used when a bundled option exists.

Incomplete Diagnosis Codes

Similarly, diagnosis codes must precisely capture a patient's conditions as addressed during the encounter and documented on the record. Omitting relevant secondary diagnoses leads to incomplete codes. This causes the perception that the level of complexity has been manipulated to justify higher reimbursement.

Have physicians provide coders with a comprehensive diagnosis list, while coders review charts thoroughly. Encourage coders to follow up for clarification when documentation lacks specificity. Conduct internal audits periodically to catch incomplete diagnosis codes. 

Incorrect Procedure Code Modifiers

Certain billing scenarios require procedure code modifiers to convey additional details. Modifiers explain special circumstances, the site of service, or professional and technical components. Applying the wrong modifier or omitting modifiers can have serious ramifications. 

For example, modifier -25 signifies that a separately identifiable E/M service was also rendered. Excluding this can signal that a service was wrongly upcoded. Have coders maintain an internal modifiers cheat sheet, double check selections, and seek physician input if unsure when modifiers should apply.

Staying Out of the Spotlight

A priority for providers large and small is flying under the radar when it comes to coding errors. By pinpointing problem areas through self-audits, analyzing coder productivity metrics, and requests for clarification, you can intercede before mistakes reach auditors’ desks. Hold regular training refreshers that address frequent errors and issues identified through self-monitoring.

When issues crop up, be proactive. Determine whether individual staff training is needed or whether company-wide protocols must improve. Develop an open line of communication between coders and physicians to address problems in real time. Stay vigilant, while being mindful of coder morale, as facilities with high turnover tend to have lower quality standards.

Implementing tighter protocols, self-auditing regularly, and supporting staff through training can help minimize the coding errors that capture auditors’ attention. Stay up to date on all coding and documentation guidelines to keep your practice running smoothly.

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