Medical billing errors can increase the bill for a routine visit from free to an expensive out-of-pocket payment. Patients can avoid common medical billing errors like upcoding and prior authorization issues by asking for itemized bills and verifying identifying details in billing, among other steps.
According to a 2025 report published by KFF, healthcare spending in the United States reached nearly $5 billion in 2022, highlighting the growing medical bills that patients often face for routine services. With ever-growing costs, it is more important than ever to check your statement to ensure that every item is billed correctly.
What Is a Red Flag in Medical Billing?
A red flag in a medical bill depends on the patient and the type of bill that they are expecting. A patient who receives a bill for a routine service may see a charge that is much higher than expected, which is a warning sign in that particular circumstance.
Actions resulting in red flags can either be the result of an innocent mistake or a malicious actor. Either way, billers need to consider hiring a life sciences attorney to assist in legal actions that arise over billing errors.
What Are the Common Types of Medical Billing Errors?
Patients must understand the signs to look for in order to understand medical billing errors. Here are some of the most prevalent types of issues, accidental or intentional, that may appear in medical billing records.
Incorrect or Outdated Codes
Since medical codes often change, it can be difficult for medical coders to keep up. Coders also have muscle memory from entering the same code hundreds or even thousands of times, and when coding high volumes, may not catch an outdated or incorrect code.
When a code is incorrect or outdated, it may mean the bill features a completely different service, leading to a large discrepancy between what the bill should be and what is on the statement.
Missing Patient Information
Billers might forget to input crucial patient information, which can then affect the overall bill. An incorrect Social Security number or patient identification number may pull up the wrong insurance policy, which in turn can result in denials or lack of coverage.
Upcoding
Upcoding is the action of entering a code that upcharges patients for the service provided, whether intentional or accidental. Additionally, some bundled codes are overall cheaper than their individual counterparts, and unbundling these codes to produce a higher bill could be an example of upcoding as well.
Not Receiving Prior Authorization
Medical files should always include prior authorization when applicable. Some insurance companies will not cover a service if it has not received prior authorization first. If that approval threshold has not been met, then the insurance company can deny the service completely, even if it would have been covered with prior authorization.
Lack of Insurance Coverage
Insurance coverage can change at any time, especially when plans reset at the beginning of the year. However, billers also need to consider lapses in coverage when a patient loses their job or has another type of qualifying event.
Double Billing
Billers may inadvertently enter a code twice and not notice before the final bill goes through. Double billing can be especially hard to spot for patients who frequently receive the same type of service, especially in routine care.
How Can Patients Learn to Interpret Billing Records for Routine Services?
Patients must understand their billing records to avoid over-billing. Even if you only go to the doctor for your annual physical, you should make sure you understand your insurance coverage and avoid being charged for services that you did not use.
Ask for Itemized Bills
Itemized bills outline every single item that was billed, along with the relevant codes and costs. It is easier to spot mistakes on itemized bills rather than a total.
Verify Each Individual Billing Code
Use the internet or other resources to check that each billing code is correct. Look for recent changes in codes.
Compare Billing Against Plan Coverage Documents
Make sure every service billed is covered in your plan document. Plan coverages often contain codes as well, so you can cross-reference the bill and your documents.
Frequently Asked Questions
What Is the Golden Rule of Medical Billing?
The golden rule of medical billing is that if it is not documented, it did not happen. Medical professionals should not bill for undocumented services because it can lead to legal challenges, especially when there is no solid evidence of the treatment provided.
More documentation is always better than none. Patients looking at their medical bills should ensure that they have all documentation that supports the treatment plan for which they are being charged.
What Are the Top Denials in Medical Billing?
While insurance companies can deny coverage for many reasons, there are some denials that are much more common. They include:
- Medical Necessity: The insurance company determines the service is not medically necessary.
- Duplicate Billing: The insurance company recognizes that the service has already been billed.
- Lack of Coverage: The patient's insurance plan does not cover the service billed.
- Prior Authorization: Certain services require prior authorization from the insurance company before final billing.
- Missing Patient Information: Key patient information is absent from the claim.
Can Patients Receive Financial Help When Paying Medical Bills?
Yes. Many hospitals offer payment plans or financial assistance to low-income patients. Depending on their gross income or the size of the bill, they may be eligible for a reduced bill.
Once the insurance company has stated what they will cover, the remainder is billed through the hospital and is up to the patient to cover. Therefore, payment plans and lower bills are often a hospital issue, rather than that of the insurance provider.
Understand Your Health Records
Medical billing errors may be frequent, but they often go undiscovered. Use this guide the next time you receive a bill that is higher than expected to ensure that you are not paying too much for routine services.
Would you like to learn more about advocating for yourself in the medical system? Take a look around our website today for further advice.
This article was prepared by an independent contributor and helps us continue to deliver quality news and information.