Applying Human Factors to Prevent Medical Billing Errors

Yazeed Alsowayid

ISYE 410L

May 1, 2017

Applying Human Factors to Prevent Medical Billing Errors

Executive Summary

        The United States of America prides itself on its health care system, although it’s expensive, it is unarguable that we are amongst the most advanced nations in the health care field. To take advantage of the benefits, there are multiple ways one can finance their needs, whether it’s privatized health insurance or a government funded program such as Obamacare or Medical. Like any other field, the current healthcare system is not immune to human error, in this case it’s the error of billing that frequently occurs in US Hospitals. In this study, the human factors needed to improve the current system could prevent thousands of patients from being overcharged, and prevent hospitals from facing fraud charges.

Introduction

Providing high quality health care services to patients has always been an important goal of the U.S. health care system. A less recognized aspect of this high quality care is the importance of properly charging patients for services they use. When hospitals or other health care facilities go under audit, discrepancies in services provided and services billed are commonly found. The magnitude of these human errors vary but ultimately, a health care facility may face severe consequences when major discrepancies are identified, especially when these errors result in payments made by government or insurance providers for services that were never rendered.

A possible solution to increase integrity in this type of accounting is the implementation of a system that allows health care providers to charge for services or resources at the time of use by a patient. A simple, yet possibly effective new system could include the labeling of all “services” provided in hospitals. Medication, clothing, monitors, machinery, etc. would all be labeled with a scan able barcode. Furthermore, the patient’s wrist band would also include a barcode that would then be set up to be linked to a billing service. Like a grocery store, any merchandise or service that patient needed would simply be scanned, tracking and recording everything electronically. Doctors, nurses, and technicians would then be trained in the correct use of the scanners, hopefully preventing more errors in the future. The scanner will send the information to a virtual charge sheet which can later be accessed by computer and billed accordingly.

The necessity for an improvement in the human factor at such facilities not only protects the patients, but more importantly the staff. In the current system, once a hospital is found with a large amount of discrepancies or overcharges, its labeled fraud. However, the stigma that follows this directly effects the staff who most likely did not have the intentions of committing fraud, but were mere victims of human error.

Method

In order for this study to be properly tested, a yearlong applied field test would be required at a health care facility. For six months, the billing cycle of the facility would continue with their previous system. The latter six months would incorporate the new system and the two periods would then be compared through audits and finances. For the purpose of this study, a smaller facility would be tested prior to disrupting the culture of hospitals and emergency rooms. For example, a nursing home, with a number of patients less than a hundred, and a fully trained staff. After the implementation of the program, the effectiveness of the scan system can then be evaluated by comparing discrepancies in the first audit with the second audit.

Ultimately, the first complication for a new system would be the funding. In this case it is in the best case of the health care facility to fund the trial period. Currently, health insurance providers benefit from facilities being deemed as fraudulent. If, rarely, these discrepancies in the billing are caught by providers they simply fine the hospitals. If a patient discovers the discrepancies, they too fine and legally seek justice from the hospitals. Therefore, although all parties could potentially benefit from the new system, it is in the best interest of all hospitals and health care facilities to invest in this system to protect themselves.