Collections and Medical invoice double-billing is the single worst issue of medical invoice management. You can say a lot about this; it’s very simple to do but very hard to find and correct.
It’s also one of the most dangerous things an accountant can do. Here’s why. Say you bill a patient $100 and send $40 to insurance and then send $60 to the patient. But, for whatever reason, your bank or card processor or insurance claims processor double-billed that payment. This means you had $20 coming in and your patient received $60.
This happens more than you would think in the United States. I’ve seen it more than a few times in my line of work and have had to deal with it a few times on my own billing.
It sounds ridiculous that a mistake this simple could happen, but its very common. It happens on accounts with as little as $25, to as much as $3,000,000 that I’ve seen paid wrong. It happens in insurance billing and private payment. It happens all the time.
That’s the reason I wanted to write this article to bring to the surface, this very common problem.
Let’s examine this common issue in more detail. I also want to point out that this very same mistake is so easy to make you could do it yourself if you are good at Excel.
Common Double-billing Errors You Can Make
I should mention that all of these errors are made by people who know how to properly handle their accounts receivables. They are also people that are following a standard medical billing process that includes:
1) Charges are sent at time of service and only once. If for any reason, you would send a charge more than once, it would be a violation of HIPAA, HITECH and you would be reported and face significant fines.
2) Receipts are requested with every pay-out, as part of the same invoice. Charges are sent and posted to the account at time of service, as an itemized component. This is an important, commonly-forgotten piece of billing. That’s why I included it in this article.
Here’s the problem: You can’t send an itemized component to the patient (i.e. $20.01) if you just sent the charge (i.e. $100.00) to your account receivable at time of service. Why? Because that would be sending two charges for the same visit and violate HIPAA and the HITECH EHR Safe Harbor requirements.
So if you send the $100 charge, how could you possibly send a $20.01?
Here’s one way.
$100 – $40 = $60
$60 – $20 = $40
$40 = $20.01
That’s one way. You could write one item for the $100 and another item for the $60 and then simply use the subtotal function in Excel to combine them into one.
But, if you simply use the subtotal function in Excel to combine the two charges into one, here is what you have:
$100 = $99
$60 = $58
$60 – $49 = $11
To get a $20.01, you need to add a $3.00 fee to the $11.00 that remains.
This is why this mistake can get so out of hand so quickly. You add a few patient payments and this error can quickly turn into thousands, or tens of thousands.
This is one of the big issues when using the subtotal function in Excel. It can get out of control very quickly and, worse, it’s a very difficult mistake to find and fix.
How to Find the Errors
The solution is very simple. You have to examine all the items, the payments and deductions that you received and apply the subtotal function to see if you are double-billing. This will allow you to see all the payments that match, even if you didn’t send all of them at the same time.
The idea is to first look at all the charges that were double-billed, then apply the subtotal function and see what it spits out as a double-bill. As you can see, you have to take into consideration that some of these will show up in the double-bills, but others are false positives.
Here’s how to determine if an item is a real double-bill. I’ll show you how to set it up for Excel in just a moment.
Use the subtotal function and, if you just used the double-bill check, there’s a pretty good chance that the subtotal function will show you the two payments. If it does, make sure the fees match, the dates match and the patient accounts match. I’ll let you figure that out for yourself.
If it doesn’t show up, then your charges are not double-billed.
So how do you set up this subtotal function? Well, it’s not easy. In fact, it’s very challenging and it takes some learning to make it work correctly.
I wanted to make sure this article clearly described the methods I have used for years and helped make things clear for others so I went ahead and wrote a brief article that will be included as a file attachment with this article.
I hope you find this information helpful and as always I’d be glad to answer any questions you might have regarding medical billing in any way I can. Just post a comment or send me a message on my blog or Facebook page. Thanks for reading.
This is exactly what we are going to face in a few years. The government will get involved, the regulators, it’s already happening. In fact I feel it started this month. We’ve become a “test case” for Medicare. They are testing procedures to ensure everything is correct. How long will it take before they test to see if the patients receive anything? It’s already happening in some areas.
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When I talk to my customers that need help with medical billing I always recommend that they first determine which type of medical billing company they want to use. If you are a physician or provider, here is a good primer. I would recommend doing your research and you can use this link for some of the basics if you haven’t already:
The easiest method would be to use Zoho Revenuecycle and use some of their add-on solutions. For example, the billing tools, which can go into any type of business. It’s a SaaS business that automates the entire billing process, so you don’t have to learn all of the manual steps as you go. If you want to learn more you can just click here: Zoho Revenuecycle: a SaaS Business that Automates the Billing Process for E-commerce.
It takes a lot of the work out of medical billing and the software is not expensive, making it very affordable. This means that anyone can get the help they need, from any part of the country. I know of one organization in a small town in Northern Idaho that is using the Zoho solution and is able to handle his billing with little stress. They can do anything that Zoho has to offer and many of the larger medical billing companies don’t
