Eight Ways for Providers to Decrease Medical Billing Errors and Fraud

Medical billing errors and mistakes are very common. In fact, some estimates have concluded that as many as 80% of medical bills contain errors. Fraudulent activity can also happen in medical billing situations. Healthcare organizations and medical facilities should take steps to reduce errors and eliminate any possible motivation and ability for people to commit fraud. While some errors and fraud are inevitable, it should not be too hard to reduce these, and this should be a priority for providers and organizations. Reducing errors and mistakes can help people trust your providers while increasing revenue and decreasing customer service costs. There are several ways to reduce medical billing fraud and mistakes, including:


Use of Electronic Health Records (EHRs)

Electronic health records allow healthcare providers to document patient care more accurately and efficiently, reducing the likelihood of billing errors and fraudulent activities. By using programs that allow users to sort, organize, and filter lists, healthcare companies can keep a close eye on their records and they will be less likely to misplace or double-bill accounts. These EHRs also allow users and billing agents to set up automatic billings and reminders which helps companies and patients stay on top of accounts and keep up to date on payments. Insurance companies can use the NPI registry to ensure that the medical professionals who are billing them have the proper verifications and numbers.


Increased Training and Education

Healthcare providers and billing staff should receive adequate training and education on proper billing practices, coding, and documentation requirements to avoid mistakes and reduce fraud. Training can help reduce the number of errors made on billing documents, as well as errors like lost accounts, misplaced accounts, and double billing. Training and adequate education can also help reduce fraud by increasing awareness and the ability of workers to recognize and identify patterns of possibly fraudulent accounts.


Regular Audits

One of the ways that healthcare companies and offices can prevent fraud and billing mistakes is by performing regular audits. Healthcare providers and insurance companies should conduct these audits of medical billing records to identify errors and fraudulent activities. Unexpected random audits can also be used in order to minimize any attempt at intentional fraudulent activity on the part of employees or workers. Hiring independent companies to perform these audits can help healthcare organizations stay on top of billing errors and maintain a level of transparency helpful in case of legal or civil action.


Use of Standardized Coding Systems

Standardized coding systems, such as the International Classification of Diseases (ICD) and Current Procedural Terminology (CPT), help ensure accurate and consistent billing practices. By using standardized systems, companies can keep records that are more universally understood and easier for employees to maintain. When new billing agents are hired from other companies or organizations, they will already understand the coding and classifications and will be able to easily perform tasks and keep records. This will also make auditing and looking up past records easier and faster.


Verification of Patient Identity

Organizations should have strict and standardized methods of verifying the identity of each patient. This should happen both on intake as well as at various points during treatment and hospitalization to prevent mix-ups. Verifying patient identity, insurance coverage, and eligibility for services can prevent billing mistakes and fraudulent activities. Verification measures should be in line with state and organizational policies and should never intrude on patient rights and privacy.


Improved Communication

Healthcare companies and providers should work to communicate effectively with other providers, regional hospitals, and specialists in the area. This can not only decrease billing errors, but it can also increase patient outcomes and decrease medication and treatment conflicts. In addition, improved communication between healthcare providers and insurance companies can help ensure that billing information is accurate and consistent. This communication can involve patient identity, billing information, treatment changes, and timely reporting.


Implementation of Fraud Detection Technology

Healthcare providers and insurance companies can use fraud detection technology to monitor billing activity and identify patterns that may indicate fraudulent behavior. This technology can help large organizations or those with a limited budget and limited personnel to stay on top of fraud or billing errors through automation. While purchasing this technology might be expensive in the beginning, over time it can mean organizations are paying fewer employees or spending less money hiring contractors and organizations to provide oversite and auditing services.


Enforcing Penalties

Of course, it is important to enforce rules and regulations regarding fraud and mistakes. Healthcare providers and insurance companies should enforce penalties for fraudulent activities, including fines, suspension or revocation of billing privileges, and criminal charges when necessary. If healthcare companies find their own employees attempting fraudulent behavior or making frequent, expensive billing errors they should take steps to prevent the situation, including training, termination, and legal action.



Overall, reducing medical billing fraud and mistakes requires a combination of efforts on the parts of providers, hospitals, and other organizations as well as insurance companies and patients. By implementing these strategies, healthcare providers and insurance companies can improve billing accuracy, reduce fraud, and provide better care for patients.


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