Medical coding plays a crucial role in ensuring accurate reimbursement, maintaining patient records, and supporting the healthcare revenue cycle. However, coding errors can lead to claim denials, compliance risks, and failed audits—potentially costing healthcare providers thousands in lost revenue and penalties.

Whether you're a seasoned medical coder, a fresh graduate, or preparing for the CPC exam, understanding common coding errors in audits and knowing how to avoid them is essential. In this blog, we’ll explore:

• The most frequent coding errors
• Why these mistakes happen
• Strategies to prevent them
• Tips for staying compliant and audit-ready

1. Upcoding and Down coding

Error: Assigning a code for a service that is more (or less) complex or expensive than what was actually performed.

Why It Happens:

• Misunderstanding of documentation
• Pressure to increase reimbursement
• Inadequate training or oversight

How to Avoid:

• Always code based on clear documentation, not assumptions.
• Regularly attend coding training and updates.
• Use coding audits to ensure coding levels match documentation.

2. Unbundling Services

Error: Reporting separate codes for procedures that are already included in a bundled code (violating NCCI edits).

Why It Happens:

• Lack of awareness of bundling rules
• Trying to maximize reimbursement
• Over-reliance on outdated cheat sheets

How to Avoid:

• Stay updated on NCCI (National Correct Coding Initiative) edits.
• Use coding software tools or encoders that flag unbundled codes.
• Cross-check with payer-specific guidelines.

3. Incorrect Use of Modifiers

Error: Applying the wrong modifier or omitting a necessary one, which can lead to claim rejections.

Why It Happens:

• Confusion between similar modifiers (e.g., 25 vs. 59)
• Lack of understanding of when a modifier is appropriate
• Documentation not supporting modifier usage

How to Avoid:

• Understand the purpose of each modifier.
• Only use modifiers when fully justified in documentation.
• Include modifier education in ongoing coder training.

4. Coding Without Proper Documentation

Error: Coding procedures or diagnoses that are not supported by the provider's documentation.

Why It Happens:

• Misinterpretation of provider notes
• Pressure to increase productivity
• Lack of detailed chart review

How to Avoid:

• Follow the rule: “If it’s not documented, it didn’t happen.”
• Encourage providers to use complete and precise documentation.
• Invest time in provider-coder collaboration sessions.

5. Using Outdated Codes

Error: Using CPT, ICD-10, or HCPCS codes that are no longer valid.

Why It Happens:

• Failing to update codebooks annually
• Using outdated coding software
• Lack of awareness of code set revisions

How to Avoid:

• Update coding resources every year.
• Subscribe to AAPC, CMS, or AMA newsletters.
• Attend webinars like “ICD-10-CM/CPT Annual Updates” regularly.

6. Incorrect Diagnosis Coding (ICD-10-CM)

Error: Selecting vague or unspecified codes when a more specific code is available.

Why It Happens:

• Limited understanding of ICD-10-CM specificity
• Provider documentation lacking in detail
• Time constraints leading to quick selections

How to Avoid:

• Use official ICD-10-CM guidelines when coding.
• Query providers when documentation is unclear.
• Choose the most specific code possible.

7. Duplicate Coding or Billing

Error: Coding and billing for the same procedure/service more than once.

Why It Happens:

• Errors during data entry
• Miscommunication between departments
• Inadequate auditing and billing controls

How to Avoid:

• Use claims scrubbing tools before submission.
• Perform internal coding audits regularly.
• Establish clear communication protocols between coding and billing teams.

8. Ignoring LCD/NCD Guidelines

Error: Coding services that are not covered due to local or national coverage determinations.

Why It Happens:

• Lack of knowledge about payer rules
• Overlooking diagnosis-to-procedure mapping
• Relying solely on EMR recommendations

How to Avoid:

• Review LCD (Local Coverage Determinations) and NCD (National Coverage Determinations) for Medicare patients.
• Use tools that integrate LCD/NCD checks.
• Train staff on payer-specific documentation requirements.

9. Improper Code Sequencing

Error: Incorrect order of primary, secondary, and subsequent codes.

Why It Happens:

• Inexperience in identifying the principal diagnosis
• Poor understanding of sequencing guidelines
• Overuse of coding shortcuts

How to Avoid:

• Follow ICD-10-CM sequencing rules.
• Prioritize the condition responsible for the encounter.
• Use official coding guidelines and decision trees.

10. Failure to Use Updated Coding Guidelines

Error: Applying old rules that no longer align with the current year's guidelines.

Why It Happens:

• Skipping annual training
• Using last year’s codebooks
• Not attending industry updates

How to Avoid:

• Attend yearly training sessions (like those at Cigma Medical Coding)
• Use the most recent official coding manuals.
• Take advantage of free CMS webinars and update documents.

Tips for Staying Audit-Ready

• Conduct regular internal audits (monthly or quarterly)
• Invest in coder education and certification (like CPC, CIC, COC)
• Collaborate with clinical staff for better documentation
• Utilize advanced coding software and AI tools
• Keep a compliance checklist handy

Final Thoughts

Medical coding is both an art and a science. Even the smallest error can snowball into denials, compliance investigations, or revenue losses. As healthcare regulations tighten and audits become more frequent, coders must commit to continuous learning, attention to detail, and compliance.

By understanding and avoiding the common coding errors in audits, you not only protect your organization but also strengthen your own career as a competent and trusted medical coder.

Looking to Level Up Your Coding Skills?

At Cigma Medical Coding, we offer CPC exam preparation, inpatient/outpatient coding programs, AI-integrated medical coding courses, and specialized audit readiness workshops to help you become audit-proof and career-ready.