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5 Biggest Medical Billing Errors that Reduce Your Practice Revenue

From lost revenue to closing down your practice, the cost of medical billing errors is significant. Research shows that doctors who don’t have the right billing systems in place have on average $3,500 in missed billings, which obviously results in a significant decrease in medical practice revenue.

medical billing errors

This amount can mean the difference between growing your practice, enjoying the work, and really making an impact in your community or needing help to keep your practice afloat.

In this post, Jaime Wong from discusses the 5 biggest billing errors he sees that reduce medical practice revenue. is a Canadian, cloud-based medical billing software company that can helps make medical practices more efficient.

The problem with medical billing

In a fee-for-service environment, a general practitioner’s office forgetting to bill for one patient visit each regular office day could result in a loss of about $6,600 per year or more.

Medical practitioners have three options for dealing with the challenge of ensuring that all services are paid for:

  1. Create, submit and reconcile all claims personally
  2. Delegate the process to a trained staff or family member
  3. Hire a third-party vendor to oversee the process

Each method has its own benefits and cost; but whichever option you choose it’s important to remember that it’s your livelihood that’s at stake. 

Before you rush off to start billing, there are a few common medical billing errors you need to watch out for when it comes to maximizing your revenue, particularly if you’re self-reporting.

Let’s have a look.

A brief overview of the billing process

The first part of the process involves documenting the service you’ve provided.

This step is important because insurance companies or other officials can ask you to verify your claims at some point in the future. If you are audited, the reviewer must be able to determine the service you provided without your interpretation of the record. A good record begins in the patient’s clinical record and allows you to refer back to the work done when necessary.

TIP: To make this process easy, we recommend that you keep your clinical record with the billing codes that are recognized by your payer as you complete an entry

After documentation, you need to submit your claims. Usually, medical billing software does this. You can submit more than one claim each time. However, it’s important to know the submission deadlines. Be sure to post your claims early so that they don’t become over-age (check with your payer). A best practice is to submit your claims on a weekly basis.

After sending your claim, the payer will ensure that your claim is complete and error-free. If your claim has any problems, it will be sent back to you along with an explanatory code to let you know how you can fix the mistake. You need to keep track of all your submissions and which claims, if any, have been rejected. Keeping track of your rejections claims will allow you to fix any errors and resubmit the claim in a timely fashion. This step alone can recover thousands of dollars in revenue for your practice.

You also need to keep track of the claims they accept. This will allow you to reconcile payments made. Keep in mind that just because they accept the claim, it does not mean they will fully pay it.

One final note about the process: You can take these steps on your own, delegate the process to staff or family members, or hire a specialist. But regardless of the path you take, it’s ultimately your responsibility to ensure that you get paid for the work you do.

The 5 biggest medical billing errors that will reduce your practice revenue

1. Not reconciling your claims

As a doctor, you are incredibly busy taking care of patients. After a long day, it can be hard to summon the energy required to reconcile your claims. However, comparing your submissions to the deposits made to your bank is the first line of defence in ensuring that you are paid for everything you are owed.

Consequently, not reconciling your claims can cost you thousands in revenue each year. It’s easy to have a few claims go stale if you don’t have a proper system in place. You need to track each and every submission until they fully pay the claim.

Ways to prevent this medical billing error

Set up a process to reconcile your claims

In addition to ensuring that you send your claims on time, be sure to set up a

system to reconcile your payments against your claim submissions. Each claim that you submit should have its own status. And you should update the claim as it moves through the process.

TIP: Visual aids make it easy to see where in the process your claims are

Overall, your claim submission process should look something like this:

  1. Submit claims
  2. Payer review
  3. Resubmit rejected claims (if any)
  4. Bank remittance
  5. Reconcile payments against submissions
  6. Resubmit/appeal unpaid claims (as necessary)

2. Submitting claims with errors

Having the wrong or missing data in a field means that your payer will not process your submission and will reject it. This is one of the biggest medical billing errors. Some common rejections are incorrect facility or patient names, invalid referring practitioner numbers, or incorrect billing codes.

Ways to prevent this medical billing error

1. Use auto-populate features to fill out the information

Doing this allows you to set up answers for questions ahead of time so that each time you bill you’re using the same answer. You will avoid missing or entering incorrect billing data. Having a medical billing software that auto-populates your data also means that you don’t have to look up information every time, which is a time saver.

2. Verify data where possible

Use medical billing software that allows you to easily verify that your data is correct. Oftentimes, simple things like a PHN are wrong. Automatic verification of data will notify you on the spot that the field has incorrect information. With the warnings, you can then take appropriate action to correct the claim before you send it to your payer.

3. Neglecting to submit or follow up on claims

In order to receive payment for the work you’ve done, you must submit your claims within the approved time period. This rule, which is sometimes frustrating when you forget, helps to preserve the accuracy of your claim. It can be hard to remember what you did for a patient after a few days let alone a few months.

This mistake is typical of a busy practice that doesn’t have enough resources, but it can happen to anyone without a proper system in place. It’s easy to forget to follow up or to prioritize patient care over administrative activities. Subsequently, you’re jeopardizing your livelihood and the stability of your practice. You need to ensure that you submit your claims in a timely fashion so that you don’t miss potential revenue.

Ways to avoid this medical billing error

1. Submit your claims regularly

One of the easiest ways to avoid this mistake is to submit your claims on a regular basis. By doing this, you create a simple way to ensure that you don’t miss a billing date. This method allows you to be more accurate since it will be closer to the time you provided the service. Also, because you’re dealing with a smaller batch of claims, you’re not as likely to feel overwhelmed by paperwork.

2. Resubmit your claims immediately

From time to time, if you’ve been keeping track of your submissions and balancing them against the deposits in your bank, you’ll notice that not all funds have been deposited.

You’ll need to do a bit of research to find out why there is a discrepancy. In most cases it will be because they rejected or adjusted your claim.

All rejected claims should be corrected and resubmitted as soon as possible. When you do resubmit, be sure to track the status of the claim and record the date that you resubmitted it. You should also keep a record of why the claim was initially rejected so you can avoid the same mistake in the future.

4. Forgetting to back up your records

One of the core tenets of a good accounting system is to always be prepared for an audit.

This means you need a full and complete backup of all your records. Fortunately, creating a backup of your digital files is simple. Many cloud-based EMRs and electronic billing providers will include this feature out of the box. Regardless of the method you choose, the consequences of not having a full backup are enormous, so make sure a reliable procedure is in place.

Ways to avoid this medical billing error

Create a backup plan

We know that if you had a catastrophic event such as fire, flood, or burglary at your clinic or home office, it would be devastating. Having a plan in place will help minimize any damages and get your business back up and running quickly.

After ensuring everyone is safe, your plan should assume that all the files and documents in your primary location have been lost and outline how you’ll recover them. Typically, this means storing your files and documents at an off-site location.

Once you’ve determined how you’ll recover your lost files, you need to create a way to maintain that backup so all files are recent. The more recent the files the less difficulty you will have in getting your business back up. We recommend that you update your off-site files on a daily basis.

We know constantly updating your records might seem tedious, but one of the benefits of electronic records management is that files are easy to duplicate. Also, the cost of digital storage is inexpensive compared to physical storage space. You can have virtually unlimited digital storage for mere pennies a day

5. Ignoring time-saving options

The medical profession as a whole would not be as effective as it is today without the powerful technological tools we have now. You need to take full advantage of the software and apps that will make your practice more efficient and more profitable.

In terms of medical billing, there are two major technologies that will help you save time and earn more.

  • The first is OCR or Optical Character Recognition. OCR works by scanning an image for letters to convert into text that a computer can understand. This means you can take a photo of a patient’s examination chart and the OCR tool will turn that image into a text submission form for your payer.
  • The second technological advance in medical billing is the creation of mobile applications that allow you to produce and submit claims from anywhere.

These applications work similarly to a desktop version of the software. However, the chief advantage is that it allows you to make a claim while you’re out in the field, instead of having to remember to bill when you return to your office.

Ways to avoid this medical billing error

1. Keep up to date on the latest trends

It’s important to keep up to date on the latest trends in technology and business. This will ensure that you stay on top of new ways of managing your business. It also allows you to be prepared for any changes that may happen throughout your career.

2. Find ways to integrate technology into your practice

Once you’ve been in the habit of staying up to date with new best practices you need

to start implementing them into your business routines.

We always recommend starting small. Look for ways to improve your business by just 1% instead of trying to boost it 100%. For example, if you want to improve your billing policies, pick one point from this guide and implement that first. Master that one new policy and then look to add another.


As a doctor, people come to you for your expertise and experience. Your ability to heal and help people is the hallmark of what you do. Spending your time on administrative duties doesn’t allow you to reach the full potential of your abilities.

Here are some other great resources if you are looking to optimize your practice by increasing compensation or reducing expenses!

What do you think? Have you made any of these medical billing errors? What processes do you have in place to avoid medical billing errors? Let me know in the comments below!

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    Jordan Frey MD, a plastic surgeon in Buffalo, NY, is one of the fastest-growing physician finance bloggers in the world. See how he went from financially clueless to increasing his net worth by $1M in 1 year and how you can do the same! Feel free to send Jordan a message at [email protected].

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