Why Getting Medical Billing Right Is Critical For The Healthcare Industry

It is only after putting in arduous years of study, practice, and preparation for a future in the healthcare that providers of medical care are able to deliver really advanced care to their patients. Every day professionals in this sector face major challenges that range from providing emergency life-saving treatment to complex medical research into diseases. However, there’s another vital aspect of a successful medical services delivery, medical billing, that does not seem to have received any focus in medical school.


In the contemporary world, the business aspects of medical care can often take precedence over everything else, even healthcare treatment in the determination of a successful and sustainable medical practice. As a result, many of today’s healthcare professionals are extremely concerned with the business of healthcare, especially patient billings. The subject is extremely important in the healthcare sector as errors in billing are currently costing American healthcare practices as much as $125 billion, and are also responsible for many practices going out of business. Some top concerns:

Errors in Medical Billing

According to industry studies, as many as 80% of medical bills suffer from mistakes. All insurance companies are extremely strict regarding correct billing procedures and figures, and even the smallest error can lead to a claim being denied or rejected. Once this happens, the process involves the physician correcting the error, submitting the claim again, and hoping for it to be accepted and the payment processed. Errors in billing can result in the payments getting delayed for months altogether putting the physician under financial strain.

The other aspect that can lead to billing errors is the failure to stay updated with the latest rules and regulations applicable to medical billing. Both healthcare administrators and doctors need to spend a fair amount of money and time on continuing education, staff training, software, etc. just to keep themselves abreast with the latest rules and regulations as well as other issues that can directly impact upon the cash flow and profitability of the medical practice. The situation is dynamic since not only are the regulations for medical billing changing but also for the entire healthcare sector. With the number of Americans with medical insurance increasing by over 30 million due to the changes brought about by the Health Care Reform bill, the importance of accurate medical billing is more important than ever before. Hence, there is an inclination of hiring a competent medical billing company to professionally handle all the billing aspects.

Impact on Patients

A poor billing system can seriously affect the influx of patients and thus the performance of the medical practice. Since medical billing involves a lot of complexities, it can be a very time-consuming process. Billing errors or system fallacies can cause not only a huge financial loss but a loss of credibility and reputation for patients. Billing mistakes can also end up putting the patient’s ability to be treated or reimbursed at risk. Rectification of mistakes can be time-consuming, complex, and expensive if legal action is initiated by patients.

Impact on Medical Practices

Financial Instability: When medical insurance claims are made that contain errors, are incomplete, or can be questioned in some way, it can lead to rejection. This will result in the health care provider having to invest time to rectify the mistakes and resubmit the claim. If the mistakes occur on multiple claims, a large amount of reimbursement money can get stuck and this can result in severe financial stress and instability that may even lead to the medical practice becoming unable to meet its financial obligations.

Insurance Audits: If the medical practice is experiencing ongoing billing errors it may result in an audit. These audits are not only very time-consuming but also distractive and stressful. The owner of the medical practice may even be required to pay the insurance company back if the audit reveals that past claims were defective and have resulted in over-reimbursements. The most effective way of ensuring that the hassle of audits does not have to be faced is to see that the medical billing and coding is done accurately and completely the first time.

Fraud Investigation and Legal Action: A large number of billing errors, documentation that is inadequate or inconsistent, and billing practices that are questionable may lead the medical practice to be investigated for fraud. These investigations are immensely disruptive and can take up a lot of your time and put to risk the viability of the medical practice. Incorrect billing may also expose the healthcare provider to legal action not only by insurance companies but also the federal government and patients that can be extremely expensive and damaging to your reputation.


Given the multiple ramifications of incorrect medical billing, it is essential that medical practices ensure that the billing process is systematic, prompt, and thorough. It may be well worth the while to engage the services of professional billing services so that you can focus on what you do best – delivering healthcare to patients.

Author bio: Arthur Miles is the CEO of a reputed medical billing company that serves a number of small and medium medical practices. Passionate about the subject, Arthur has been writing extensively on medical billing and its ramifications on medical practices.