Understanding Unbundling in Medical Billing

Medical billing is a complex procedure, and each service has a different current procedural terminology (CPT) code. American Medical Association (AMA) has developed and assigned codes to each medical service. Sometimes, unbundling in medical billing occurs due to incorrect codes. Code correction is crucial for physicians to receive payments. In addition, Medicare and Medicaid reject medical claims with incorrect codes. Frequent unbundling becomes a serious concern. Therefore, avoid unbundling by outsourcing medical billing and coding services. This blog sheds light on unbundling and its consequences. So let’s get started!

What is Unbundling in Medical Billing?

Unbundling is a process in which two codes are written separately in a medical bill but must be put under a single code. It happens when all the treatment components should be under a single CPT code for payments but billed separately. For example, the multiple radiology images have a single code. It is considered unbundling if the patient bill has multiple codes for every image.

Intentional/Unintentional Unbundling

Unbundling in medical billing happens intentionally or unintentionally while generating a bill. To increase reimbursements the frequent intentional unbundling is considered fraudulent. The physician or other billing staff can face legal notices and penalties. Conversely, the unintentional unbundling may be due to incomplete guidelines or updates of the coding system. Therefore, medical practices must follow CPT coding updates for successful healthcare financial management.

Consequences of Unbundling in Medical Billing

Claims Denials

Unbundling is one of the reasons behind claim denials. The insurance companies have experts who are well aware of the coding guidelines. Due to incorrect codes in the bill, the payer refuses to pay the bill, resulting in claim denials.

Audits and Investigations

Regular claim denials due to unbundling can lead to investigations and audits. Those who are involved in fraudulent activities receive penalties.

Legal Notices

The physician may receive a legal notice for charging the patients and payer more than usual. Intentional unbundling is a fraudulent activity that may lead to legal notices.

Revenue Loss

The revenue loss occurs due to claim denial. Claim denials are the result of missed information and incorrect codes. Therefore, it is essential to enter the correct information to lower the chances of the payer’s rejection.

License Cancellation

The investigation team may cancel the license if a physician performs unbundling even after receiving multiple warnings.

How to Avoid Unbundling

If there’s an unintentional unbundling in medical billing, the billing staff can follow these steps to avoid billing mistakes.

Follow Coding Guidelines

The billing staff should follow the coding guidelines while generating the patient bill. Furthermore, follow the updated policies for smooth revenue optimization in healthcare.

Regular Audits

Auditing and continuous monitoring prevent medical errors. It helps identify and eliminate the causes behind frequent unbundling. Similarly, practices can perform financial analysis in healthcare to detect patterns and reimbursements.

Consult Coding Experts

Medical practices can hire or consult coding experts to avoid mistakes while generating the patient bill. It is vital to follow the coding guidelines. Therefore, outsource medical billing and coding services to avoid unbundling issues.

Final Thoughts

Unbundling in medical billing negatively impacts the healthcare organization’s overall revenue and reputation. It is essential for billing staff to prevent unbundling. Ensure a single coding bill for medical services and follow the AMA and CMS coding guidelines to avoid warnings and legal penalties.