What Is An Entity Code Error In Medical Billing?
8 Jun 2023

What Is An Entity Code Error In Medical Billing?

Medical billing entity refers to a relationship, Limited Liability Company or other entity whose only significant duty is generating medical bills and codes for the patient’s visit to their physician and collecting payments for professional medical technician services on behalf of an affiliated medical group or a subordinate. It is also responsible for transferring all of its revenue on a regular basis to such affiliated medical groups. 

In simple words, a medical entity is commonly defined as an individual or thing with an independent existence, such as an individual, a corporation, or a local company that will help prepare medical bills using accurate medical codes to help you receive your reimbursements. If you outsource medical billing services to a reliable and HIPAA-compliant medical billing company, you can get accurate entities in medical billing. 

Prior to providing medical billing services, a healthcare practice emphasizes gathering and validating each entity’s information. After reading this article, you will hopefully have a detailed knowledge about what is an entity code error in medical billing and how to avoid it? 

But before diving deep into the entity code error, first, understand what is the significance of a medical billing entity.

Why Medical Billing Entity Is Important? 

A medical coding department in a medical billing company uses EHR software or electronic medical records (EMR) technology to keep track of patient health records and obtain payment for services provided by healthcare specialists.

In order to keep the records up to date, medical coding specialists enter the codes for diagnosis and treatment received by patients and a catalog of completed processes.

Medical centers, hospitals, and rehabilitation facilities use these medical codes to translate their services into billable procedures on medical claims. Although, healthcare facilities manage their codes and billable charges digitally, however, there are some small-sized practices that maintain their medical codes in paper form.  In both ways, it is the responsibility of medical coding specialists to ensure that medical codes are accurate and updated properly. 

Since accuracy and updated data are the prerequisites of medical coding. Any error in these factors causes problems with medical billing and coding procedures. Therefore, medical billing entities should focus on ensuring data’s security and confidentiality. They should also learn and adopt competitive security measures in order to protect delicate patient information. Also, they should ensure compliance with federal policies like HIPAA (Healthcare Insurance Portability & Accountability Act). 

What Is the Requirement Of Medical Coding In Entity Billing?

  • Examining medical records.
  • Choosing the appropriate medical code for medical and diagnostic procedures.
  • Make sure the medical codes are recognized by the insurance company.
  • Verification of documents by healthcare providers and facility staff. 
  • Interaction with healthcare specialists and an assistant to facilitate information accuracy. 
  • Keep track of patient data and monitor changes to stay updated regularly. 
  • Record coded data and prepare records. 
  • Ensure the privacy and security of patient data. 
  • Check out the accuracy of patient’s records and reports. 
  • Assign accurate codes for diagnostic and therapeutic medical procedures. 
  • Follow up on the updates of the medical code more frequently.
  • Consolidate and evaluate patient data for future research. 

What Is The Significance Of Medical Codes For Billing Entity?

Accurate medical coding is essential to prepare billable medical claims and receive reimbursements. If there is an excessive delay in claim submission and you’re not able to meet the insurance company’s deadlines then you can claim your reimbursements. Moreover, if you use incorrect medical codes then it results in claim denials/rejections. It thrusts more work stress on the healthcare providers because they have to re-document and appeal their denied claims. It also imposes a financial strain on patients and increases their healthcare expenses. 

Regardless of the complexity and magnification of each medical procedure, any medical information delivered should be recorded in the documents. For this purpose, healthcare practices should deploy resources who can encounter patients as soon as they visit your healthcate office. They should start collecting your patients’ data and infuse this into your medical billing system. 

After the paperwork, review your documents, verify their eligibility, and validate the accuracy of patient information. After that, medical billing and coding specialists should start preparing bills right away in order to meet the deadlines of claim submission. 

What Is Entity Code Error In Medical Billing?

Any information error about the medical billing entity in medical coding and claims is known as entity code error. Following are a few examples of entity code errors. 

Examples of Entity Code Error

Patient Member ID

It is the responsibility of the medical billing and coding staff to make sure that there are no inconsistencies with this reference. If you encounter any missing detail about patients’ demographics and member ID then it will cause entity code error. 

Therefore, it is important to correctly manage this reference during the preparation of medical claims. If the patient has changed their coverage plan, or they are not covered on the date of service; then this error will also occur down the line when the patient ID won’t match with the payer’s system. 

Unidentified ID

This code necessitates using an entity code; in this case, the medical service provider can check each box of the claim to determine which entity can’t be identified. 

Incorrect Patient Demographic

The most critical entity code occurs due to incorrect patient demographic information. Therefore, the patient registration staff should confirm and then enter the patient’s details into the EHR system. 

Even if the patient has visited your office before, you should collect and verify the patient’s demographic information on every visit. It reduces discrepancies in information and you can stay updated with the changes and upgrades in patients’ data in real-time. 

Even if you have outsourced medical billing services then you should share updated patient information with the medical billing company. So they can assist you with medical billing and coding tasks without any errors and mistakes. 

How To Avoid Entity Code Error?

Earlier, we’ve discussed a few examples of entity code errors and their impact on your medical billing system. Following are the proven solutions that help you cope with entity code errors and make your medical billing and healthcare revenue cycle management system run seamlessly. 

  1. Insurance companies use the same NPI and Tax ID on file with payers or insurers for a healthcare provider. Therefore, medical billing companies should review the information for entity code prior to the submission of medical claims. 
  2. If they cannot find out relevant information about the payer, then they should directly contact the patients/payers directly to explore more about the medical billing entity. 
  3. If the front desk staff has mentioned incorrect information about patient demographics then they should double-check and verify the patient’s eligibility criteria. 
  4. Suppose you’ve later discovered that the medical claim is denied because the patient has recently updated the coverage plan. Then you should instantly contact the insurance payer to make sure that the patient is an active member under the insured’s policy. 

If you take proper actions to negotiate a settlement of all concerns with medical and the implementation of all necessary corrective information. Then the inusrance company will validate your medical claim from medical specialists and rebill the services to resubmit all affected claims. 

Struggling with increasing claim denials and account receivables (AR)? CureCloudMD is a US-based HIPAA-compliant medical billing company that has been helping several healthcare providers with medical billing and coding outsourcing services. Schedule a free medical billing audit with our billing specialists to tune your practice for an added boost of productivity.  

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