Most claim denials are caused by a small number of common medical billing errors. Errors such as incorrect patient information, outdated ICD-10 codes, missing prior authorizations, coding issues, and incomplete documentation are causing denials.
Kansas Medical Billing processes thousands of claims each year. The same errors appear at the top of the denial list every time. Many of these mistakes go unnoticed until a claim is denied. At that stage, the staff has to take more time to rectify it and re-claim it, It further delays cash flow and adds to the cost of collections.
The first step to achieving a better clean claim rate is to know the most common billing errors and the steps you can take to avoid them.
What Are the Most Common Medical Billing Errors in 2026?
Medical billing errors are inaccuracies in the claim submission process. These errors cause payers to reject, delay, or reduce reimbursement. They occur at every stage.
In 2024, the Medicare Fee-for-Service program recorded an improper payment rate of 7.66%, representing $31.70 billion in incorrect payments. The errors below are responsible for the largest share of those denials.
1. Incorrect or Incomplete Patient Information
The top cause of front-end claims denials is incorrect patient information. A transposed digit in a date of birth, misspelled surname or incorrect insurance ID is sufficient to trigger the rejection of the claim before it is seen by a human reviewer. This error comes when the patient is being registered before the provider even sees them.
Common triggers include:
- wrong member ID
- Outdated insurance policy number
- Incorrect group number
- Mismatched name spelling between the claim and the insurance card
- Wrong date of birth.
Each one is a denial that costs on average $25 per claim in correction costs.
Confirm patient and insurance information on every visit. Make sure that the front desk staff rechecks whenever the insurance card is presented. Implement real-time eligibility verification software to alert eligibility mismatches before submission.
2. Outdated or Invalid ICD-10 Diagnosis Codes
Claims denial is the direct result of the use of a deleted, inactive or non-specific ICD-10 code. CMS makes updates to the ICD-10-CM code set each October. Codes that were deemed valid last year could end up being broken down into subcategories, deactivated or changed completely. An outdated code sends a message to the insurance company that your records are not medically necessary.
A claim submitted to an ICD10 code that is not specific, but has a more specific code available will be denied by the majority of commercial policies and Medicare LCDs. This is particularly frequent in multi-specialty practices where their coders are based on several service lines.
Subscribe to CMS ICD-10 annual update alerts. Update your EHR code library every October. Audit diagnosis codes quarterly using a sample of denied claims.
3. Invalid or Deleted CPT Procedure Codes
Submitting an invalid or deleted cpt code will automatically be rejected in the system when claiming. The AMA makes revisions to the CPT code set every January. Codes are updated, modified and eliminated on an annual basis. CMS also releases HCPCS quarterly updates, the latest of which took effect in July 2025.
Those practices that do not update their CPT libraries at the beginning of each year will submit out-of-date codes in Q1 and beyond. This means dozens of denials per month for high-volume practices for every attribute they missed.
Schedule a reminder on your calendar for January 1 and July 1 to upload CPT and HCPCS codes to your billing system. Submit to a claim scrubber tool, which will pre-claim check codes against the current AMA and CMS databases before claiming.
4. Missing or Expired Prior Authorization
Filing a claim for a service that needed prior authorization, but didn’t happen first, is a denial that is hard to overcome. A growing set of services require prior authorizations: some imaging services, some surgical services, specialty medications, durable medical equipment, and many outpatient services. Prior auth requirements have increased substantially since 2023, especially for Medicare Advantage (MA).
The OIG has documented that Medicare Advantage plans refuse an unusually high percentage of services that would be covered under traditional Medicare, many of which are due to authorization problems. Medicare Advantage plans experienced an increase of 4.8% in prior authorization denials between 2023 and 2024 alone.
Create an authorization checklist, based on each payer’s current requirements. Dedicate a staff member responsible for monitoring auth status, expiration and re-authorization schedules. Do not agree to any services that call for authentication without authorization written in advance.
5. Duplicate Billing
Duplicate billing is when the same service is billed to the same payer for the same date of service. It typically occurs when an encounter is resubmitted after it’s been denied and the submissions are not deleted from the queue, or when two billing staff members submit the same encounter at the same time. All payers will catch duplicate billing and it may lead to a compliance audit.
In addition to denials, patterns of duplicate billing may also be seen as fraudulent billing activity, even if the intent is not to defraud.
Use a claim management system to identify duplicate claim submission before it leaves the practice. Set up a denial resubmission process, so that the first claim is closed before the corrected claim is opened.
6. Upcoding and Downcoding
Upcoding is charging for a more serious service than documented. Downcoding is charging for a lower level, for fear. The two are medical billing mistakes. Upcoding will draw OIG’s attention and lead to recoupment requests. Downcoding means that the practice loses a legitimate income stream and it affects the overall benchmark data over time.
Upcoding is possible because of misinterpretation by the coder, template-based EHR documentation or fraudulent work. If discovered during an audit of the payer, any of these may lead to serious financial consequences since the over-charge would need to be returned along with interest and potential civil penalties under the False Claims Act.
Perform internal E/M audits based on the 2021 AMA E/M guidelines. Train physicians to take information and document it properly to support the level billed and not reach a level. Have a certified professional coder (CPC) audit a sample of claims on a monthly basis.
7. Unbundling of Services
Unbundling is using multiple CPT codes for procedures which are supposed to be bundled in one CPT code. National Correct Coding Initiative (NCCI) edits are published by the CMS to specify what procedures should be bundled. For instance, if a Comprehensive Metabolic Panel contains certain electrolyte tests, then those individual tests cannot be billed separately.
Overbilling, claim denial, and possible OIG investigation are the risks of unbundling. It is a top improper payment pattern in CMS Recovery Audit Contractor (RAC) audits and is a frequent occurrence annually.
Match submitted combinations of codes to the current NCCI tables from CMS. The claim scrubber should be a routine pre-submission scrubber of claims that can include NCCI edit logic.
8. Incorrect or Missing Modifiers
A claim’s pricing and eventual payment depends on the modifier(s) assigned. If a modifier is incorrect or is missing, the claim is priced and paid differently. Modifiers provide further clinical information to the payer: bilateral procedures, multiple surgeons, assistant surgeons, or services rendered on the same day. If a modifier is not submitted on a bilateral procedure, the provider will be paid for one side only. A wrong modifier can cause a request for medical review or denial of coverage.
59, 25, 51, GT and 95 are the most commonly misused modifiers. Due to the ongoing evolution of payer requirements for virtual service billing post-COVID, telehealth modifiers (-95 and -GT) became a high denial area in 2025.
Develop a policy document on the use of modifiers for each payer that you are contracting with. Review each payers modifier guidelines annually (it does change). Educate coders on the difference between informational and payment impacting modifiers.
9. Missing or Insufficient Documentation
Insufficient clinical documentation is the leading cause of medical necessity denials. If the claim cannot be supported by the chart note, in terms of diagnosis, service level, and clinical indication, the payer can and will deny it.
One of the biggest factors is the template-heavy way in which EHR documentation is done. If a doctor just copies and pastes a previous note, or just uses a pre-written template without modifying it. Payers look for this pattern; it occurs most frequently in E/M and surgical claims.
For physicians who bill for time-based codes, make them keep track of the specific reason for the visit, the clinical decision making they did, and the amount of time. Monthly audit of sample charts for code level billed, based on CMS 2021 E/M guidelines.
10. Eligibility and Credentialing Errors
Billing a payer for a provider who is not yet credentialed with that plan results in a denial that cannot be appealed, only corrected. Credentialing errors are common in growing practices, practices that recently added providers, or those that expanded into new payer networks. A common mistake is assuming that a Medicare enrollment is automatically accepted by all Medicare Advantage plans, it is not.
Eligibility errors; billing a patient’s inactive plan, secondary plan as primary, or the wrong payer entirely are equally costly. Private insurers reject 1 in 7 claims, and a significant portion trace back to eligibility mismatches that should have been caught at check-in.
Verify active insurance eligibility for every patient, every visit, using real-time eligibility tools. Track credentialing status across all active payer contracts. Do not schedule new providers to see patients on a specific payer until credentialing confirmation is received in writing.
Medical Billing Errors Rate by Error Type
The table below summarizes the 10 billing errors, the healthcare billing error codes or categories they affect, their denial trigger, and the fixed priority level based on denial volume data.
| # | Error Type | Code / Area Affected | Denial Trigger | Fix Priority |
| 1 | Incorrect patient information | Demographic / insurance data | Auto-rejection at payer intake | 🔴 High |
| 2 | Invalid ICD-10 code | ICD-10-CM diagnosis codes | Non-covered or unsupported diagnosis | 🔴 High |
| 3 | Invalid CPT code | CPT / HCPCS codes | System rejection — invalid code | 🔴 High |
| 4 | Missing prior authorization | Auth-required procedures | Service not authorized | 🔴 High |
| 5 | Duplicate billing | All service lines | Duplicate claim flag | 🟡 Medium |
| 6 | Upcoding / Downcoding | E/M and procedure codes | Level not supported by documentation | 🔴 High |
| 7 | Unbundling | CPT bundled procedures | NCCI edit violation | 🟡 Medium |
| 8 | Incorrect modifiers | CPT modifier fields | Pricing error / medical review | 🟡 Medium |
| 9 | Insufficient documentation | All service types | Medical necessity not supported | 🔴 High |
| 10 | Eligibility / credentialing errors | Payer enrollment | Provider not in network / plan inactive | 🔴 High |
How to Reduce Your Practice’s Medical Billing Error Rate
A structured denial prevention workflow reduces healthcare billing errors by addressing them at the point of origin, before submission. The 4 steps below cover the highest-impact controls for most practices.
1. Verify Eligibility and Demographics at Check-In
Eligibility verification in real time can catch errors before the visit is coded. Use a tool that confirms the following in a single workflow:
- active policy
- the correct payer
- coordination of benefits
- the provider’s credentialing status
2. Scrub Every Claim Before Submission
A claim scrubber checks for invalid CPT codes, NCCI edit conflicts, missing modifiers, duplicate submissions, and ICD-10 specificity, errors 2, 3, 7, and 8 in one automated pass. Claims that pass the scrubber have a significantly higher first-pass acceptance rate.
3. Build a Prior Authorization Tracker
Maintain a payer-specific list of services requiring prior authorization. Track approval numbers, approval dates, and expiration windows in your PM system. Flag any encounter scheduled within 14 days of an auth expiration for renewal.
4. Conduct Monthly Denial Trend Analysis
The group denied claims by denial reason code each month. The top 3 denial codes in your practice tell you exactly where to focus training. Most practices find that 2 to 3 root causes account for 60% to 70% of denial volume. Fix the root cause, not just the individual claim.
Stop Denials Before They Cost Your Practice More Revenue
41% of U.S. providers now report claim denial rates of 10% or higher. If your practice falls into that group, the 10 billing errors covered above are the first areas to review.
At Kansas Medical Billing, we help your practice identify the root causes of claim denials and build cleaner billing workflows. Our team provides medical billing, coding, eligibility verification, denial management, credentialing, and revenue cycle management services. Our services are designed to improve first-pass claim acceptance and improve reimbursement.
Ready to reduce denials and strengthen your revenue cycle?
