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Midland Memorial Hospital explains $555,000 COVID-19 billing error

The hospital noticed the error and self-reported the issue, and now ensures their third party audits all COVID-related claims.

MIDLAND, Texas — Mistyping a code into a computer may seem minor, but it can be the route of a major mistake.

This is reality for Midland Memorial Hospital after last November when 87 miscoded and uninsured COVID-19 patients never actually had the virus. They were mislabeled.

The result was more reimbursement money from the federal government, specifically a branch of Health and Human Services called the Health Resources and Services Administration.

"What used to be a big stack of paper is now a computer generated record and then it takes that clinical information, moves it over to a patient billing information where it is coded by expert coders, the bills are sent typically electronically to whatever payer is appropriate for that patient," said Russell Meyers, CEO at Midland Memorial.

The expert coders actually work for the hospital, but offsite.

"Expert coders look at what happened clinically, what's been documented and turn that into a coded bill and those codes dictate what will be paid by the payer. Sometimes payers challenge those, sometimes they have other reasons why they don't want to pay us or they pay us differently from what we expect," Meyers said.

Now we know how the system works, so what's the problem?

The hospital CEO says the sequencing of coding is different for insured COVID patients compared to those uninsured.

"The way that HRSA wanted us to code COVID-positive self paid patients was different than what we would've done for anyone else," said Samuel Moore, MMH VP and CFO.

Instead of listing another condition before COVID like they typically do, HRSA requires them to list COVID first, so the coding got mixed up and wasn't recorded accurately.

20-25% of COVID patients who get service from the hospital are uninsured and that's the group that was affected by the miscoding.

"Those can be carefully scrutinized now by the leadership in our revenue cycle and departments so that we're having multiple different eyes on the coding and making sure that they're accurately coded before those bills go out." Meyers said.

A few months after the hospital discovered this mistake they asked their third party billing auditor to review 100% of all COVID-19 claims. That's still in effect today.