Mistakes in medical billing can cause serious problems for both MIPS healthcare providers and patients. These days, extreme cases of malpractice have become a rare phenomenon. However, errors can lead to malpractice claims, costing money, causing legal troubles, or resulting in reputational damage.
Medical billing is monitored closely by both governments and insurance companies. Therefore, billing mistakes can lead to denied claims or lawsuits.
In this guide, we explore common negligence and malpractice pitfalls around billing and how healthcare providers can sidestep them.
What is Medical Billing Malpractice Claims?
Malpractice claims generally refers to medical errors, such as administering the wrong treatment or failing to diagnose a condition. Doctors and healthcare providers often carry malpractice insurance to shield themselves from lawsuits.
Billing staff, however, are not delivering medical care. Instead, they process payments, which carries its own risks. Billing mistakes can lead to financial losses for both the practice and the patient. Regardless of whether a practice handles billing in-house or with the help of a third-party provider, every healthcare provider needs to take action to prevent errors.
Here are some of the most frequent traps for billing negligence and malpractice that the providers need to keep an eye upon.
Billing Agency Negligence
Billing agencies assist doctors and hospitals in collecting payment; however, they are not immune to missteps. In the case that a billing agency makes an error that results in a patient losing money, the medical practice may face legal action and potential malpractice claims.
If a patient is wrongfully charged and incurs a loss, they can bring a lawsuit against the practice for damages. Misinformation can be easily corrected, but the damage is done, and claims of legal nature still remain.
Privacy Breach – A More Significant Violation
One of the most essential chores in medical billing is the protection of essential patient information. The HIPAA helps keep patient data private.
If a billing agency or practice releases private patient information without permission, even by mistake, they can incur severe penalties. The federal government is very serious about HIPAA violations, with possible consequences of:
- Fines and penalties – Businesses can be fined thousands of dollars per violation.
- Loss of business contracts — Practices and agencies may lose clients as a result of legal violations.
- Lawsuits from patients – If any personal information is disclosed, impacted patients can initiate a lawsuit.
Billing and Privacy Breach Prevention Tips
- Train employees about HIPAA and patient privacy.
- Store and share medical data on secure systems.
- Provide access to sensitive information only to staff who need it.
By taking these steps, practices can minimize privacy risk.
Why Your Business Needs Liability Protection
Even the most experienced medical billing specialists make errors. That’s why you need liability insurance.
What is Liability Insurance?
Liability insurance protects medical billing professionals from claims based on errors, privacy breaches, or negligence. If a billing error causes financial damage to a patient or practice, insurance can help pay for attorneys’ fees and settlement costs, reducing the risk of malpractice claims.
How to Protect Yourself from Billing Malpractice Risk
If you are a medical billing professional or operating a healthcare practice, here’s what you should do to remain protected:
- Hire trained billing staff — in-house or outsourced, billers need to know the rules of the industry.
- Use trusted billing software – Automated systems help with diminishing human mistakes.
- Verify claims prior to submission — Each bill must be accurate.
- Know your regulations – Because billing laws are changing all the time, ongoing training is a must.
- Get liability insurance — This gives you additional coverage if you have legal issues.
Final Thoughts
Billing errors may be less deadly than medical mistakes, but they can result in serious money problems and even jail time. These steps include preventing mistakes from occurring in the first place, protecting patient privacy with the proper use of private health data, and ensuring that healthcare professionals carry the proper liability insurance to avoid malpractice claims in our recent case.
