What is Unbundling in Medical Billing and How it Opens Ways for Fraud?

Coders in the medical industry provide a unique code consisting of 5 digits to each treatment or procedure that is rendered to a patient by a medical practice. These codes are used throughout the billing process. The codes are a standard way for a medical practice to describe the procedures and services for which it seeks reimbursement. Insurance companies and those in charge of government programs (like Medicare and Medicaid) use the codes to figure out how much money to pay out.

The regulations that determine how codes are to be assigned may be somewhat complicated. This complexity is brought to light when the several processes, each of which has its own code, are conducted simultaneously. Should they be billed as one procedure, or should they be treated as two different ones? Coders have to answer this question, and they have to do so by referring to the rules that govern coding.

Depending on whether procedures are done separately or together, the right billing code may or may not be determined. Whether or not you “bundle” or “unbundle” certain procedures affects how accurate your medical bills are. Incorrect choices are one of the most prevalent contributors to billing problems.

Before we discuss in detail what is unbundling in medical billing, let us give you a brief idea of the CPT codes that are used in medical billing.

CPT Codes in Medical Billing

CPT Codes in Medical Billing

Medical billers collaborate with medical coders or take on some of the latter’s responsibilities. Coders are in charge of giving Current Procedural Terminology (CPT) codes to the different medical procedures and services that are done. A basic CPT code is a five-digit identifier that precisely specifies the process or service that physicians give to their patients. These codes are assigned by the American Medical Association (AMA). The American Medical Association (AMA) is in charge of both making the codes and keeping them up to date.

Government agencies and insurance companies have reached a consensus to charge a predetermined amount of money for every covered treatment or operation that is assigned a CPT code. Because of this, it is very important to use the right CPT code to get the right payment for services and procedures. The HCPCS codes that must be used to bill Medicare and Medicaid must include the CPT codes that were made by the American Medical Association.

Medical billing coders are responsible for reviewing patients’ medical records, determining the service or treatment that the patient got, determining the CPT code that best characterizes that service or process, and then adding the CPT code to the billing. It is essential to proper invoicing that the appropriate CPT code be used. Due to the fact that the AMA has produced hundreds of CPT codes, this might be a challenging undertaking.

There may be more than one code that may be used to represent the same service or operation, but this will depend on a number of different aspects. The amount of time it takes to carry out the service might determine the value of a code (such as an office visit). The degree of difficulty of a process and whether or not a service was delivered in-person or via telehealth are two other aspects that play a role in the assignment of a code.

When it comes to certain medical treatments, one of the most important considerations is whether or not the procedures are routinely performed and whether or not the patient who was billed for them had them at the same time or at a different time. This aspect is reflected in the invoicing rules that control the bundling and unbundling of different types of services.

What is Bundling in Medical Billings?

What is Bundling in Medical Billings

In medical terminology, “bundling” refers to the practice of using a single CPT code to indicate two distinct procedures that were carried out at the same time. When a relatively minor operation is done at the same time as a more substantial surgery, a healthcare professional is often required by bundling regulations to use the CPT code for the more significant procedure.

An apparent illustration of this is the use of a needle to be inserted into a vein, which is described by one of the CPT codes. This code is used in situations in which the insertion is performed independently of any other medical treatment. However, when inserting a needle is only a part of the process of a complex procedure, only the CPT code corresponding to the more complex procedure should be used.

Endoscopies of the nose for diagnostic purposes are another example. If a patient is having a nosebleed while undergoing a nasal endoscopy, it is customary for the attending physician to cauterize the bleeding. It is not necessary to include a second CPT code that details the cauterization of a nosebleed if you use the CPT code that is designated for nasal endoscopy. However, if a doctor were to do a nasal endoscopy on a patient and the patient was to return with a nosebleed later in the day, it would be permissible for the doctor to charge for cauterizing the hemorrhage since that issue did not take place while the endoscopy was being performed. Following this step, the coder would include a modifier to the CPT code in order to make it very obvious that the cauterization constituted a “distinct service.”

What is Unbundling in Medical Billings?

The process of unbundling is the inverse of bundling. Unbundling may occur when a coder uses two CPT codes instead of one. Unbundling may also happen when a programmer bills for two different services at the same time, even when the code for the primary service already anticipates that the secondary service is delivered. Unbundling leads to excessive billing since a bill with two separate charges will always be higher than a statement with a single charge that covers everything.

Inflated billing might be the result of either a coder who does not grasp the CPT coding system or a coder who is sloppy with their work. When unbundling is a common billing issue, the medical practitioner may have encouraged the coder to unbundle as a means of increasing income. In other words, unbundling is done on purpose. Investigators of fraud might consider repeated unbundling to be a warning sign.

In the event that a party is involved in a legal dispute and wants to demonstrate that a medical bill was reasonable in order to be reimbursed for the cost, unbundling might be used as proof that the charge is excessive. Charges that are not grouped together often need to be combined together in order to create a bill that is appropriate.

The Bottom Line

We expect that now you have got a fair understanding of what is unbundling in medical billing. Experts in medical billing look for unbundling in medical bills. An expert in medical billing may evaluate whether or not independently classified procedures were done at the same time by comparing the patient’s medical records to the billings submitted. A thorough comparison has the potential to reveal unbundling problems, which leads to excessive invoicing.

Experts in medical billing may also assist legal professionals by detecting billings that are unjustified or fraudulent. After conducting a thorough examination of medical invoices, a specialist in medical billing may identify a number of problems, including unbundling, being one of them.

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