If you’ve ever dealt with a leaky garden hose, you know what it’s like to be a payor facing a costly medical claim or a big bill from a provider.  The reasons range from errors in CPT coding to cost shifting from scheduled care, inflated claims, fraud and just plain honest mistakes.

So, what to do about medical bill waste?

Protection against paying for unrelated care or over-paying for treatment of a covered injury requires a better understanding of the basics, beginning with what billing mistakes lead to higher provider bills.

The most common billing issues the MKC team has noticed in its reviews of thousands of provider bills are…

  • Upcoding
  • Unbundling of codes and
  • Misuse of modifiers

Here’s a closer look at each of these factors that often lead to waste:

The FBI estimates that healthcare fraud alone costs the country an estimated $80 billion a year!
  • Upcoding

Certain medical services ­­ such as office or hospital visits ­­ are billed at different “levels,” depending on the type and amount of services provided.  We see these on five different levels, each requiring documentation of medical history, physical examination and medical decision making. In MKC’s experience, our medical bill reviews have shown that over 50% of these visits are billed at a level of care that exceeds the accompanying, supporting documentation.

  • Unbundling of Codes

Medical procedures are billed using 5-digit numerical codes.  In some instances (mainly surgical procedures), a single code does not fully explain the exact nature of the surgery; therefore, multiple codes are required.  These secondary codes are required to be indicated as such and are paid at a reduced rate.  If this indication is absent, you’ll end up overpaying the bill.

  • Misuse of modifiers

Modifiers are numerical additions attached to the main procedure code that alter the payment; for example, multiple procedures, surgical assistant or co-surgeon.  If these modifiers are ignored or submitted incorrectly, this can result in an overpayment.

Whether because of misuse of modifiers, unbundling of codes, upcoding or some other billing issue, leaky medical bills can hurt your bottom line.  However, an expert bill review — combining knowledge of hospital billing policies, cost-to-charge ratios, and clinical knowledge to understand what was done and how — can result in substantial cost savings, as well as improved understanding of services and treatments rendered, compliance issues, provider red flags and a clearer understanding of the care delivered.