You may have heard the term unbundling before, especially when it comes to medical bills or working in the bills or healthcare field, but no, there is no unwrapping involved with it!
Unbundling represents a certain practice of medical billing, which may have serious financial and compliance impacts. You should learn about unbundling in medical billing, whether you are a medical biller yourself, a healthcare provider, or a patient who simply wants to have a better idea of what s/he is being billed.
Let us simplify it in a business language to understand what the term unbundling medical billing is, the significance attached to it, and how it can result in an entity referred to as unbundled claim denial.
What is Unbundling in Billing?
In medical billing, unbundling has been defined as the act of billing as opposed to the combined services that are supposed to be charged as a single service using the same procedure code. That is, when several procedures are performed simultaneously as a standard treatment, one billing code (also known as a bundled code) will be applied.
However, unbundling is when a provider charges each treatment separately, which may increase the total amount charged.
That could be easily compared to the example of going to a restaurant and purchasing a combo dish. It is sold as a set burger, a drink, and fries at a fixed rate. But suppose the restaurant itemizes charges on you even after you ordered a combo. That, essentially, is unbundling when it comes to medical billing.
Examples of Unbundled Services in Medical Billing
In order to have a broader idea about it, we would present several examples of unbundled services in the sphere of medical billing:
- A surgeon carries out a procedure involving an incision and stitching operation; however, a bundled code is not used, instead the billing team invoices using two different codes; the first code deals with the incision and the second with suturing.
- A test that involves capturing and interpreting an image under one diagnostic test is charged using two codes, despite two actions being charged under one code.
Such services are regarded as unbundled where there is no clinical reason to do so.
What Makes Unbundling Occur?
Unbundling may be deliberate or it may be accidental. Here’s how:
1. Billing Errors
There are instances where unbundling will occur because of ignorance or human failure. The billing staff can also enter several codes, whereas the bundled code should be entered.
2. Upcoding to Get Higher Reimbursement
In more worrying scenarios, providers can pull back services intentionally by unbundling in order to earn higher payments. This is a fraudulent billing and may involve legal actions and an audit.
3. Irrelevant Coding Education
Guidelines of medical coding are evolving very fast. Unintentional unbundling can also be the result of using old codes or simply of being uninformed about new bundling regulations.
What is Unbundled Claim Denial?
In the case where services were unbundled in a way that was inappropriate, a payer, e.g., an insurance company or Medicare, can deny, called an unbundled claim denial. That is, the payer will not accept the reimbursement of the claim as it is submitted claiming that it was not in compliance with billing regulations.
The denials slow the cash flow down not only that, but they may also overload the billing staff with following up on the administrative duties, resubmission, and appeals.
Strategies in Preventing Unbundling in Medical Billing
Unbundling mistakes should be avoided as this will help to remain compliant to earn timely payments.
Some of the best practices include the following:
1. Follow the Current CPT and HCPCS Codes
Be in touch with the newest procedural coding manuals and guidelines. Bundled codes are also used with regular updates, thus preventing situational mistakes.
2. Train Billing and Coding Staff
It is essential that your billing and coding team be constantly trained. Ensure they are properly informed on the necessity of compliance and interpretation of bundling rules.
3. Use of Advanced Billing Software
Making use of a billing program, which contains NCCI edit checks, allows for the automation of the process of detecting and labeling claims that may be unbundled.
4. Audits on a Regular Basis
Do frequent internal audits to identify unbundled services in medical billing and address any cases of unbundling prior to resulting in claim denials or payer reviews.
5. Correctly Use Modifiers
There is a possibility that some services can be unbundled, but with a good reason, then you must be able to use the right modifiers (such as the Modifier 59) to justify it. A compliance problem may arise due to the misuse of modifiers, however.
Effects of Inappropriate Unbundling
Unbundling of medical billing in the wrong way may involve awful consequences:
- Financial Loss: Rejected claims result in a cash flow that is slowed down and needs to be corrected.
- Audits and Investigations: Repeated violation of unbundling will result in audits by insurance carriers or government schemes.
- Penalties and Fines: The offence of willful unbundling leads to fraud, prosecution, and heavy fines.
- Trust: Patients and payers can lose trust in a provider who makes mistakes with their claims so often.
Final Thoughts
It is important to understand the concept of unbundling medical billing in order to prevent making prohibitive mistakes, noncompliance, and to retain good terms with payers.
However, keeping in touch with news and information, with sophisticated billing tools and a well-trained staff, you can minimize the likelihood of unbundled services in medical billing and make them efficient, accurate, and ethical.
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