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Medical Coding Error Consequences (and Solutions)


Medical coding is vital to practically every facet of modern healthcare. It guides the patient journey, impacts administrative workflow and influences the revenue cycle.

Accurate medical coding is essential to delivering quality, economical healthcare. Yet coding errors remain prevalent, and the problems caused by medical coding mistakes are far-reaching.

Approximately 80 percent of medical bills are believed to contain inaccuracies, and medical coding errors are a leading culprit of billing mistakes. Even when these coding errors are honest blunders, they often cause overcharges, reimbursement delays and claim denials, and they can require excessive time and resources to resolve.

Following is a closer look at a few major repercussions of incorrect medical coding, as well as how a single-source solution that incorporates artificial intelligence (AI) and expert human resources can improve coding accuracy and increase reimbursements.

Coding Errors and Patient Care

Effective and financially viable healthcare services hinge on the patient experience, and inaccurate medical coding has the potential to disrupt patient care.

Consider minor variances in diagnosis codes. An inaccurate diagnostic code or a code with a missing modifier entered by one provider could cause confusion if a patient is referred to a specialist or lead to improper testing or other follow-up services with another provider.

Incorrect or inadequate medical coding can tarnish the patient experience in other ways as well. Miscoding often leads to billing errors, which can cause patients to be overcharged beyond their expectations and capacity to pay.

For example, a recent Consumer Financial Protection Bureau (CFPB) report found that thousands of U.S. Armed Services members saw their credit scores hurt by medical billing errors and subsequent delayed payments in 2021. Ultimately, medical coding errors and associated billing inaccuracies are costly for all healthcare stakeholders.

Coding Errors and the Revenue Cycle

Medical coding is the heart of the healthcare revenue cycle. Coding is the basis for how healthcare services are translated into billable revenue.

Inaccurate or inadequate medical coding contributes to reimbursement delays, denials and limitations. In a post about the financial consequences of bad coding, the American Academy of Professional Coders (AAPC) states that miscoded services can cost a single practitioner tens of thousands of dollars per year in lost revenue.

And the costs of coding errors aren’t limited to revenue. Medical coding mistakes require a substantial drain on time and internal resources to correct and manage related appeals.

On the flip side of losses, a recent Health Leaders article reported that a lone primary care physician could gain more than $120,000 in annual preventive-services revenue if they resolved medical coding and billing issues. The article cites a study that indicates many physicians are providing services that they are inadequately coding or not coding at all.

Coding Errors and Compliance Penalties

Coding mistakes are often discovered during the patient journey or amid billing and reimbursement, but sometimes they slip through the cracks until a government or insurer audit. When this occurs, providers may face penalties related to fraud or abuse under the False Claims Act (FCA).

The American Medical Association (AMA) clarifies in an article about common coding mistakes that fraud involves intentional medical coding misrepresentation for financial gain. Medical coding abuse relates to unintentional errors that lead to billing for more complex or costly services than were provided.

Even innocent coding mistakes can prove costly. The FCA currently allows recovery of up to three times the amount of damages sustained by the government as a result of false claims, in addition to financial penalties for each false claim filed; fraud charges may be accompanied by monetary penalties as well as exclusion from Medicare and Medicaid programs, and even imprisonment.

The Benefits of Technology-Driven Medical Coding

“An ounce of prevention is worth a pound of cure,” declared Benjamin Franklin well before the advent of ICD-10 and CPT codes (and to be historically accurate, he was warning Philadelphians about fire risks). But Franklin’s metaphorical message holds true for contemporary medical coding: The best cure for the costly problems of incorrect coding is to prevent coding errors from happening in the first place.

AI has infiltrated nearly every area of healthcare, from diagnostic tools to health record management to claims processing. Medical coding is just the latest niche to reap the benefits of AI-fueled automation.

An optimal, single-source coding solution deploys specialized human resources and AI-enhanced technology to heighten accuracy, accelerate workflow and improve reimbursements. GeBBS Healthcare Solutions, for example, employs a team of more than 2,500 coders who are certified by the AAPC or the American Health Information Management Association (AHIMA).

These elite coders are backed by an AI-enabled technology platform designed to elevate accuracy, flag inconsistencies and catch incomplete data in real-time. GeBBS’ proprietary, cloud-based software integrates easily with existing systems to facilitate data extraction and sharing.

GeBBS’s internal case studies of its enterprise coding solution demonstrate a 96-percent-plus accuracy on inpatient and outpatient coding, an 11-percent revenue increase through audits and education, and a 40-percent increase in additional revenue capture. GeBBS’s coding solution has also shown a 75-percent-plus reduction in evaluation and management (E/M) leveling issues.

GeBBS’s scalable coding solution has further proven a 30- to 40-percent cost savings compared with provider-based coding. But the benefits of a coding solution aren’t all monetary.

Working with a coding partner allows healthcare providers to focus more of their efforts on what matters most: patient care.

Forward Thinking: About GeBBS Healthcare Solutions

GeBBS Healthcare Solutions is an acclaimed leader in health information technology and revenue cycle management (RCM) services, including medical coding and billing.

GeBBS is dedicated to helping our partners achieve their goals and sustain their success. We support our clients with an accomplished team of coding professionals, audit authorities and IT experts. GeBBS is proud to be recognized as a Leader by Everest Group’s Revenue Cycle Management Operations, one of Black Book Market Research’s Top 20 RCM Outstanding Services, one of Inc. 5000’s Fastest-Growing Private Companies in the United States, one of Market Research’s Top 20 RCM Outstanding Services and one of Modern Healthcare’s Top 10 Largest Revenue Cycle Management Firms.

Connect with GeBBS Healthcare Solutions today at gebbs.com and request a consultation or demonstration.

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