Consequences of Errors in Medical Coding for Healthcare Service Providers

Why is the entire healthcare system looking for efficient coders?

Why is it a tedious process to train medical coders?

Why is innovation a top priority in the medical coding industry?

The answer: Medical coding needs high attention to detail along with efficiency. Lack of attention to detail leads to coding mistakes that can lead to grave consequences. It is difficult to crack the combination.

Even the best of coders are prone to errors because of medical coding being a tedious process. Upcoding, under coding, unbundling, and incorrect modifiers are some of the most common coding errors.

High frequency of these mistakes lead to both short-term and long-term problems. Short-term consequences include issues with reimbursements. However, if these are not acted upon timely, they could have a strong negative impact on your establishment. Long-term issues involve claims of fraudulence and misconduct. If such issues arise, there is a looming threat of permanent closure.

Here are the three most common issues that any healthcare service provider faces because of coding errors.

Negatively affect patient care:

Medical coding plays a greater role in patient care than it seems.

Patients are treated based on pervious diagnosis in their charts. If the coder misinterprets the initial diagnosis and puts in the wrong code, the patient might not get the correct treatment. Improper treatment to the patients is a big cause of concern for any healthcare provider – it leads to irreversible loss in terms for losing patients and accruing revenue, and spotted reputation.

Overall, even a change in single digit in the code can lead to ruining your reputation.

Reimbursement Problems:

Delayed partial or denied reimbursements from the insurance companies is the most common problem after inadequate coding. Healthcare services form billable revenue when each service, treatment, and diagnosis is assigned medical codes. Insurance companies then match theses codes to the service and then issue reimbursements. The accuracy of medical codes decides the revenue to be reimbursed. Any discrepancies in coding lead to direct revenue losses for the healthcare provider.

However, there is always a scope for correcting and resubmitting denials to collect maximum revenue.

According to, approximately 65% of denials are never corrected and resubmitted to collect maximum revenues.

Fraudulence claims and fines:

The errors caused due to under coding and upcoding are often regarded as fraudulent, irrespective of the reason for the error.

In 2020, the US Justice Department charged 300 individuals their involvement in healthcare fraud, waste, and abuse schemes that resulted in more than $6 billion in false and fraudulent claims. (

Such fines in the form of heavy fines, federal penalties, cancellation of licenses, and imprisonments are a threat to any healthcare facility and lead them to being shut down forever.

Medicodio is an AI-powered coding tool that reduces medical coding costs and improves efficiency by up to 45%. A great fit for RCM companies and hospital billing departments, Codio suggests medical codes (CPT, ICD10, HCPCS, modifiers) by reading patient demographic info from EHR systems and Physician Notes/Chart. After the medical coder makes a selection from the list of suggested codes, CODIO sends your codes to the billing system.

Raj Vaidyamath

Raj Vaidyamath

Brings 20+ years of experience in transforming company into industry leader.Deep background and understanding of enterprise, SaaS, cloud and consumer businesses has positioned well to manage and grow global organization at scale.

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