Finding the right individual healthcare insurance can be a nightmare. Navigating your way through the maze of companies, options, protection limits, deductibles and all the fine print can be intimidating and overwhelming. It’s a difficult task for most people, made all the harder when medical coding errors are part of your record.
Consider the shocking case of a Gulfport, Mississippi resident as reported by Consumer Reports. Sheila applied for individual health insurance from three different insurers and was denied by all of them. Surprised by this, she investigated the situation and came up against the MIB.
Formerly known as the Medical Information Bureau, the MIB is an insurance industry clearing house, functioning within the industry in much the same way as credit reporting agencies function in the financial industry. Virtually every aspect of an individual’s medical history is stored in its database.
Applications for individual health insurance are run through MIB’s database, verifying the information submitted by the applicant. The stated purpose of the MIB is to protect insurance companies from applicants who knowingly or unknowingly omit information pertaining to their insurability. They claim to have saved their member companies over a billion dollars. Insurance companies use the information in the same way they use information from motor vehicle administrations, adjusting premiums or denying coverage.
But what did Sheila do wrong? Well, nothing as it turns out. She just found herself on the wrong side of a bureaucratic nightmare. Sheila learned through her investigation that her record with the MIB indicated that she had a history of Chronic Obstructive Pulmonary Disease, known as COPD. While Sheila does have asthma, COPD is indicative of more severe lung diseases, such as emphysema. The insurance companies were not going to insure her with that type of medical history.
Knowing that the information in MIB’s database was wrong, Sheila continued to investigate, ultimately discovering that the error originated in her doctor’s office. A simple medical coding error spelled disaster for her. Endless letters and phone calls to her doctor’s office and the MIB have been fruitless. One little alpha-numeric code has blocked her from getting individual health insurance.
Medical coding errors wreak havoc for healthcare providers, insurance companies and governmental agencies as well. The consequences can be simple and easily rectified, or they can be very serious.
If the medical coder uses a code which does not accurately reflect medical necessity, or the diagnosis and procedure are not congruent, then the application for reimbursement will be denied. The coder must then spend additional time and effort investigating the reasons for denial and rectifying them. This duplication of effort drains revenue from the healthcare provider and directly impacts its financial health.
If the coder makes a mistake on the billing number, the insurance company or a governmental agency (Medicare or Medicaid, for example) can reimburse the wrong provider and report inaccurate information to the IRS. Untangling this confusion can be time consuming and frustrating. It also can be costly in terms of lost revenue or wasted pay for unnecessary effort, or both.
Errors in coding procedures and treatment can lead to underpayment of claims, resulting in a direct hit to the finances of the practice. On the other side, repeated coding errors that result in inflated claims can lead to some nasty repercussions with regulatory agencies.
Medical coding errors can be expensive for the consumer as well. ABC News and others have reported that the error rate on medical bills may be as high as 80%. A survey conducted by Consumer Reports, however, found that only 5% of respondents had found an error on their bill. The overwhelming majority of estimated errors, then, are simply paid by both insurance companies and consumers. Many of these errors are the result of assigning incorrect medical codes to the patient’s bill.
Errors in medical coding can have significant and widespread impact on consumers, healthcare providers and insurance companies. The effects can range from disastrous personal hardships to frustrating and inefficient duplication of effort. With the increasing complexity of medical care and its delivery, and with the growing demand for better care from patients who are more well-informed than ever, the strain on the industry will continue to grow. Factor in the increasing need for care from the aging baby boom generation, and the implication is clear. Well educated and well trained medical coders who are efficient, careful and attentive to detail will be in greater demand. Proper planning and skillful preparation will open the door to many lucrative opportunities for medical coders who can help reduce errors and increase efficiency.