Because of the pressure and fast pace of a hospital environment, it is possible to have mistakes occur. For this reason, the Medicare Conditions of Participation require hospitals to retain records for five years to enable reference to them if necessary. Following are four common medical billing mistakes that your staff can make, and which you need to avoid to make sure your facility yields improved profits.

Incorrect Medical Billing

This occurs when a practice bills a patient for services they did not receive, or bills them for canceled or wrong services. These errors are easy for a facility to make especially when they manually handle their billing and can lead to a bad reputation in the community, the risk of penalties for fraud, and financial issues when your books reflect more money than is actually made.

Upcoding and Undercoding

Upcoding may occur when a diagnosis is inflated and shown as serious when it is moderate, or a patient gets billed for a service that was covered instead of the one that was administered because the one that was administered was not covered by Medicare.

Undercoding occurs when a provider leaves out a medical billing code for a less expensive procedure hoping to save a patient money or avoid an audit. While it may be intentional or an honest mistake, you can encourage your staff to double-check their work so as to avoid time and money that will be spent to fix the damage once it occurs.


This is when services are billed under separate codes when they are normally billed as a package and is illegal because it can inflate profits for a practice, even when done as a mistake.

Mixing Up a Denied Claim with a Rejected Claim

A denied claim is one found to be unpayable by the insurance company due to omitting information, patient coverage, or billing errors, and in some cases may be eligible for appeal. A rejected claim on the other hand is a claim with incorrect insurance or patient information, including transposed digits in a patient’s identification number. Make sure your staff knows how to bill and what services to bill to avoid this.

Avoiding these errors in medical billing stands to save you a lot of time and money, and while it may take a while to make sure all systems work well and everyone knows what to do and how to do it, you save a lot in the long term.