Learn What is Unbundling in Coding

Touseef Riaz

March 9, 2022

Unbundling in Coding

What is Unbundling in Coding?

CPT codes are specific codes assigned to medical procedures or services provided for medical billing. When it comes to medical billing for healthcare services, unbundling is one of the common medical coding errors – the wrongful use of codes. In medical billing, there are a number of errors. These errors result in claim denials, lower reimbursement rates, hence lower revenues. But what is Unbundling in coding and medical billing?

What is unbundling in medical coding?

Using different codes for reporting a medical procedure when a single comprehensive code exists is known as unbundling. There are a number of medical services that can be coded against one comprehensive CPT code. Using separate codes results in higher reimbursements from the insurance carriers. However, unbundling codes is an unethical practice and can result in civil liability for the healthcare providers.

When does someone ask what is Unbundling in coding? I answer them generally unbundling can also be referred to as fragmentation.

Medical billers or billing companies should know exactly where to use the separate codes and a single comprehensive code in a medical claim. There are proper guidelines for using CPT codes.

What is bundling and unbundling in medical coding?

Opposite to unbundling, bundling in medical coding is when medical billers combine separate (two or more) codes as one. All of this contributes to lesser paperwork and results in insurance carriers paying for only the dominant code. Therefore, bundling in medical billing and coding results in fewer receivables meaning low reimbursements.

Yes, bundling codes can be accurate if more than two procedures were performed in a visit – highlighting the more dominant code. Note that it must be the same encounter. Or if there is a “bundled” comprehensive code to report the procedures performed. Bundling codes is the right approach in a number of instances, but the issue is where these comprehensive codes are billed separately.

Unbundling in Coding

Example of Unbundling in coding:

As mentioned earlier, unbundling is the use of separate codes to the bill when a single comprehensive CPT code exists. To understand What is Unbundling in coding? Let’s have an example. Stitches can be a separate procedure (if a patient shows up with an accident or open wound). But when we talk about incision and stitches for and after the surgery, it is considered a bundled medical service. Unbundling, in this case, would be coding incision and stitches performed for or after surgery as two separate procedures. Therefore, an unethical act.

Unbundling can also be facilitated via software like EHR (electronic health records). The healthcare provider can easily use the patient notes from a previous visit using this software. Therefore, justifying the medical claim under those separate codes (unbundling).

Importance of Medical billing in healthcare:

Medical billing plays a vital role in the healthcare system; correct medical billing ensures timely payments, therefore, higher revenues. Medical coding and billing also ensure that the patients don’t have to pay more than they should. If not done accurately, it can result in late payments, lower reimbursement rates, and lesser revenues.

What are CPT codes?

CPT stands for Current Procedural Terminology. These are codes that represent a specific medical procedure or service. This code set is used to report any surgical, diagnostic procedure, or service rendered by the healthcare provider to the insurance payers.

What are bundled CPT codes?

There are a number of benefits of bundling CPT codes (if done correctly). Some medical procedures are available in bundles involving services that are provided together. For instance, incision and stitches procedures for and after the surgery are billed under one code. Bundling codes can definitely simplify the billing process; however, it can also result in various other issues. Not just the healthcare provider, the insurance payers are also just billed once instead of multiple bills. Along with this, they have a huge impact on administrative work as well – lesser codes, lesser work to be done! It also results in lesser paperwork saves time as well as money.

There are also some drawbacks of bundling; for instance, if the medical service or procedure falls under a code set that can’t be bundled. It may result in the provider not being reimbursed for all the services provided.

How do you unbundle a CPT code?

Billing the medical procedures separately when there is a single comprehensive code available can result in a number of problems. But there are some instances where unbundling is the right option.

The physician provides the necessary treatment to the patient. For example, a healthcare provider performed nasal endoscopy on a patient, and later the patient checked again in with a nose bleed. In this case, the physician must be reimbursed for both services (endoscopy and treating nosebleed). This is why the services must be reported separately.

In order to unbundle a CPT code, modifier 59 is used. Modifier 59 in medical billing is for a “distinct procedural service.” This modifier indicates that the medical procedures were performed separately. Therefore, the physician must be reimbursed for the services rendered separately. Not using the right modifier or neglecting using the modifier entirely results in payer bundling up the codes. By doing so, the healthcare provider only gets paid for the more dominant procedure. Centers for Medicare and Medicaid Services consist of all kinds of guidelines of using a comprehensive code & separate code.

Are unbundling codes illegal?

Unbundling as well as upcoding is considered to be unethical in healthcare. According to CMS, unbundling and upcoding is a misuse of codes in a medical claim. It categorizes as Medicare abuse. Note that this practice being unethical doesn’t mean it is legal to do so. Centers for Medicare and Medicaid Services (CMS) clearly state that unbundling and upcoding “can expose providers to criminal and civil liability.” According to CMS, unbundling and upcoding are “unethical billing practices.”

What is upcoding?

This practice is also considered fraudulent. It involves the healthcare provider submitting a wrong medical claim by billing a more expensive medical procedure than the actual one. This act results in higher reimbursements.

When is unbundling considered fraud?

Note that separately reporting the procedures is not fraud until it is done to misrepresent the report. Modifier 59 is the most commonly used modifier for separately reporting the medical procedures using CPT codes. But when this modifier is used without any justification, it is considered unbundling, therefore, actionable.

For instance, a patient with a nosebleed shows up at the hospital, and a diagnostic nasal endoscopy is performed to identify the cause of the bleed. In this scenario, only the endoscopy will be billed as it was done to eliminate the nosebleed. And billing for both procedures separately will be considered unethical (unbundling).

Other common errors in medical billing and coding:

Errors in medical billing and coding in healthcare services can result in higher denial rates and late payments. Submitting clean claims can reduce errors in medical billing and therefore increase revenues. The clean claim rate must also be higher for a higher reimbursement rate. Following are some of the most common billing errors:

– Incorrect or incomplete documentation:

Complete and correct information about the patient’s medical procedures helps produce a clean medical bill. Incomplete documentation regarding the healthcare services can also make it difficult to use correct codes.

– Under coding:

As the name suggests, this practice involves not billing for all the medical procedures or services rendered. The patient can avoid high costs and the healthcare department audits with this.

– Upcoding:

If a more comprehensive or complex procedure code is used, then the procedure or service actually rendered is known as upcoding. Like unbundling, upcoding is also a practice that results in higher reimbursements – both being Medicare abuse.

– Using wrong modifiers:

There are specific guidelines for using the modifiers in medical billing. Some of the commonly used modifiers include; Modifier 25, 26, 59 & 91, etc. Using the wrong modifier or not including any can also result in claim denials.

– Using incorrect procedure or diagnosis code:

Every medical service and procedure has a specific CPT code. Even a slight human error of inputting a wrong character can change the complete code. This can also happen if complete and accurate information is missing due to sloppy documentation.

All of the above-mentioned coding errors play a significant role in higher claim denial rates, lower reimbursement, and clean claim rates. Therefore, contributing to late payments, lower revenues, and audits.

Outsourcing Medical Billing Services:

How to avoid errors in medical billing? Medical billing is an essential payment practice in the healthcare system. It ensures that the healthcare providers are being reimbursed for the services and procedures they render. Complete revenue cycle management of a healthcare organization depends on accurate medical billing. If not done correctly, it directly impacts healthcare revenues and cash flows. Outsourcing medical billing comes with a number of benefits, including lesser errors and costs, faster payments, and higher revenues.

Some of the benefits of outsourcing medical billing services include the following:

–      More focus on patient care: With outsourced medical billing, healthcare providers won’t have to monitor administrative tasks and can focus more on patients.

–      Lesser errors: Medical billing companies are up-to-date regarding all the guidelines and their changes – making sure to avoid any errors.

–      A team of highly specialized medical billers: Medical billing companies like UControl Billing have certified medical billers and coders on board.

–      Faster payments and higher revenues: Lesser errors and lower claim denials result in higher reimbursement rates.

–      Single point of contact: Instead of dealing with a number of insurance payers.

–      Lesser costs: with outsourced medical billing services, the healthcare providers don’t have to worry about administrative costs or salaries. By outsourcing medical billing, the cost of both time and money can be saved.

Frequently Asked Questions (FAQs)

What is unbundling coding in medical billing?

When a single medical procedure is billed against separate CPT codes, even though a comprehensive code exists is known as unbundling. It is a common coding error and can also be done intentionally (in order to increase reimbursements). Unbundling is an unethical practice and can result in “civil liability,” according to CMS.

What are common unbundling coding errors?

Unbundling is a common coding error that results in higher reimbursement rates and revenues. For example, billing for incisions and stitches performed in surgery can be done under one CPT code. However, if they are reported separately, it is considered unbundling.

What is the denial code for unbundled service?

Unbundling is a medical coding error where a comprehensive procedure code is billed under separate codes. The denial code for an unbundled service is CO p14. This code demonstrates any unbundled relation with another service or procedure.

References:

https://www.cms.gov/Outreach-and-Education/Medicare-Learning-Network-MLN/MLNProducts/Downloads/Fraud-Abuse-MLN4649244.pdf

https://medicaid.utah.gov/Documents/pdfs/ClaimDenialCodes.pdf

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