The most costly medical billing mistakes are usually gaps in the process rather than single typos. Common examples: no routine eligibility check, visits that never become charges, coding that nobody reviews, rejections and denials that nobody works, payments that nobody compares with the contract, and deadlines that nobody tracks. Each one lets money that the practice has earned go uncollected, or leaves it holding money it has to give back.
This guide is about those practice-level mistakes and how to fix them. For the individual reasons a payer gives when it denies a claim, see why insurance claims get denied. Payer rules vary. Where a specific rule is quoted, it is Medicare's or Medicaid's, and it is cited at the end.
1. Treating registration as data entry
The mistake: insurance details are copied once and never re-checked, other coverage isn't asked about, and the subscriber is recorded as the patient by default.
Why it costs: claims come back rejected or denied because the payer can't find the member, the coverage has ended, or another plan should have paid first. None of that has anything to do with the care provided.
The fix: scan the card and confirm demographics at every visit, ask about other coverage, and give the front desk a short checklist. When a registration error causes a denial, report it back to the front desk rather than fixing it quietly in billing.
2. Skipping eligibility and authorization checks
The mistake: eligibility is checked only for new patients, or only when someone remembers. Prior authorization requirements are looked up after the service.
Why it costs: a service done without a required authorization is usually denied however well it's documented. A patient whose coverage has lapsed turns into a balance that is hard to collect.
The fix: run an electronic eligibility check (the HIPAA-standard 270/271 transaction) before every visit. Check authorization requirements when the service is scheduled, and record the authorization number where the claim will pick it up.
3. Letting visits slip through without charges
The mistake: nobody reconciles the schedule with the charges, so a visit, a procedure or a supply never gets billed. This is common where charges are entered by hand or late.
Why it costs: a charge that is never entered is never denied. It never shows up anywhere, so nobody notices it.
The fix: compare each day's completed appointments with the charges entered, and track how many days pass between the visit and charge entry. Late charges also eat into the payer's filing window.
4. Coding without review, in either direction
The mistake: codes are chosen from habit or a short pick list. Nobody checks them against the documentation, and the coding team gets no feedback from denials.
Why it costs: undercoding leaves earned payment uncollected. Overcoding, unbundling and unsupported modifiers create overpayments and compliance risk. The HHS Office of Inspector General lists upcoding, unbundling and failure to use coding modifiers properly among the billing risk areas for physician practices.
The fix: code to the documentation, no higher and no lower. Audit a sample of claims against the records regularly, as the OIG's compliance guidance recommends, and train on what the audit finds. When the documentation is unclear, query the clinician rather than guessing.
5. Not working rejections every day
The mistake: clearinghouse and payer rejections pile up in a queue nobody owns.
Why it costs: a rejected claim hasn't been received. Medicare, for example, doesn't treat a claim returned as unprocessable as a claim, and gives it no appeal rights. Meanwhile the filing deadline keeps running.
The fix: give one person ownership of rejections, clear them daily, and fix the scrubber rule or registration step that caused each type. The clean claims guide lists what a claim needs to go out clean.
6. Resubmitting denials without finding the cause
The mistake: a denied claim is resubmitted or written off, but nobody records why it was denied or which step caused it.
Why it costs: the same denial comes back next month, and appeal deadlines pass. A Medicare redetermination, for example, must be requested within 120 days of receiving the initial decision.
The fix: log every denial by reason code and by the step that caused it, and review the log monthly. The OIG's guidance for physician practices recommends reviewing the practice's denial history and correcting the most frequent sources of denials.
7. Posting payments without checking them
The mistake: payments are posted as received, and contractual adjustments are accepted without comparing the allowed amount with the fee schedule the payer agreed to.
Why it costs: underpayments look like normal adjustments, so nobody appeals them.
The fix: load your contracted rates into the billing system, or at least spot-check your highest-volume codes by payer. For Medicare rates, use the CMS Physician Fee Schedule look-up. Query anything paid below the agreed rate.
8. Keeping money that isn't yours
The mistake: credit balances and payer overpayments sit on accounts because nobody is assigned to review them.
Why it costs: Medicare requires an identified overpayment to be reported and returned, generally within 60 days of identifying it (with limited suspensions while a good-faith investigation is under way). Accuracy runs both ways: money received in error is a liability, not revenue.
The fix: review credit balances on a schedule, investigate each one, and refund or report it in line with the payer's rules.
9. Losing track of deadlines
The mistake: nobody tracks filing limits and appeal limits by payer.
Why it costs: a claim filed late is denied (reason code 29). Medicare's filing limit is generally 1 calendar year after the date of service, federal Medicaid rules cap it at 12 months, and commercial contracts set their own limits.
The fix: keep a table of filing and appeal limits by payer. Report unbilled visits and open denials by age, and flag anything nearing a limit.
10. Letting A/R age without a plan
The mistake: unpaid claims are followed up oldest first, or loudest first, with no view of which are close to a deadline or most likely to pay.
Why it costs: the older a claim gets, the more work it takes to resolve, and some pass the point where they can still be appealed.
The fix: work accounts receivable from an aging report grouped by payer and reason, and set follow-up intervals. How to read an A/R aging report walks through the report itself.
11. Leaving patient balances until the end
The mistake: copays and known deductible amounts aren't collected at the visit, and statements are hard to understand.
Why it costs: balances collected weeks later take more statements and calls, and some are never paid.
The fix: estimate what the patient owes from the eligibility response, collect known amounts at check-in, and send statements that show what the plan paid and why the balance remains. For uninsured or self-pay patients, follow the federal good faith estimate rules.
12. Running billing without reports
The mistake: the practice sees total collections but not why money is late.
Why it costs: without denials by reason, A/R by age and payer, and payment turnaround by payer, every problem is found by accident.
The fix: review a short monthly set of reports and act on what they show. The medical billing KPIs guide explains which ones to use.
How do you find which mistakes your practice is making?
Start with the evidence you already have: the denial log, the rejection queue, the A/R aging report and a small audit of charts against claims. The OIG's physician-practice guidance suggests starting with a baseline audit and then auditing periodically. If you'd like help looking, Highview's medical billing team can start with a free call about your workflow.
Sources
- HHS-OIG, Compliance Program for Individual and Small Group Physician Practices (65 FR 59434, October 5, 2000): coding and billing risk areas, auditing, denial review.
- eCFR, 42 CFR 401.305: reporting and returning Medicare overpayments.
- CMS, Medicare Claims Processing Manual, Chapter 1: §70 (timely filing), §80.3.1 (unprocessable claims).
- eCFR, 42 CFR 424.44: Medicare time limits for filing claims.
- eCFR, 42 CFR 447.45: Medicaid claim submission within 12 months.
- eCFR, 42 CFR 405.942: time frame for a Medicare redetermination request.
- eCFR, 45 CFR Part 162: HIPAA standard transactions.
- X12, Claim Adjustment Reason Codes.
- CMS, Search the Physician Fee Schedule.
- CMS, Good faith estimates.