Medical billing and coding errors primarily result in a denial or rejection of the claim. Most of the errors do not result in a legal investigation. When a claim is denied the healthcare provider doesn’t get reimbursed. In such cases, a detailed bill is issued to the patient. It becomes the responsibility of the patient to pay the bill.
Whenever a claim is rejected, the healthcare providers suffer from reduced cash flow. Claims that are rejected are usually sent again for approval. The mistakes are detected and corrected and proper documents are submitted once again for the approval of the insurer. However, all these procedures take time.
Sometimes owing to a billing and coding error, the insurer might reimburse only a part of the total claim money. This is to avoid delays in reimbursement. However, the healthcare provider may not be satisfied by this decision of the insurer and he might appeal against the adjustment made.
In case of certain errors, the insurer might impose a penalty of certain amount. The claim may be reimbursed in time but the penalty amount would be deducted from the total claim money. Such events mostly happen when the insurance specialist files the claim after the deadline announced by the insurance company.
In certain cases, the insurance company withdraws all the direct dealings with the healthcare provider. In most cases, the healthcare provider and the insurance company has a mutual agreement according to which the insurance company recommends its policyholder to get treatment from the healthcare provider. In return for this favor, the healthcare provider offers a rebate on his total medical fees. However, in case the insurance company decides to quit all dealings with the healthcare provider, then it may not accept any more claims directly from the healthcare provider. In such cases, the healthcare provider asks the patients to pay all the bills. And at this stage, the patients or the policyholders directly approach the insurance company and submit their claims.
All the aforementioned events are related to unintentional errors or mistakes that seem rather innocent or dumb. However, in case of a real fraud or in case of an intentional mistake from the healthcare provider’s side, the insurer might take a tough stand. He might initiate a legal enquiry or investigation against the healthcare provider. And if the investigation leads to a conclusion where the healthcare provider is proven guilty, there could be grave penalties and punishments. The healthcare provider may also lose his medical license. Since he is guilty of criminal charges, he might even face a prison sentence.
To conclude, we can say that medical billing and coding errors have far-reaching consequences. Hence it is best to avoid such errors as far as possible.