What Is Unbundling in Medical Billing
                     What Is 
Unbundling in 
Medical Billing?
• The importance of medical billing isn’t something 
that we need to restate, but it is something that can 
be particularly challenging for small medical offices in 
particular. One of the main issues that healthcare 
providers, big or small, tend to have with medical 
billing is something known as unbundling – this is a 
practice that can lead to things:
• – Financial losses
• – Incorrect claims
• – Even legal trouble
• Let’s explore what unbundling in medical billing is in 
a bit more detail, including why this sort of thing 
happens and how you’re able to shield yourself from 
potential pitfalls:
Understanding Unbundling 
in Medical Billing
• In essence, unbundling is something that occurs when a 
healthcare provider or billing department submits separate 
claims for medical services you’ve provided that should 
actually all be grouped together under a single CPT code.
• As you may be aware, CPT (Current Procedural 
Terminology) codes are what we use to describe all the 
medical services and procedures our patients receive from 
us, so there’s a CPT coding system to go along with this 
that’s meant to simplify billing while still ensuring that your 
practice is getting compensated properly for your work.
• Every one of these CPT codes represents a specific 
medical service or procedure – whether it’s 
performing surgery or prescribing medication – 
and these are the codes you then send to the 
insurance companies and payers in order to 
actually process medical bills.
• Having said that, in some cases, you might 
accidentally separate CPT codes to describe parts 
of a procedure you’ve done that were meant to be 
grouped under one code – this is what we call 
unbundling. The end result? Inflated charges for 
the same patient and incorrect reimbursement for 
your practice.
Why Does Unbundling 
Happen?
• Unbundling can generally occur for a handful of 
different reasons, so no one will immediately 
assume that you had malicious intent if this 
happens to you.
• In the majority of cases, unbundling is basically just 
the result of medical coding errors, whether your 
practice’s billing team doesn’t know how to code 
the correct way for certain services or if they 
simply lack an understanding of the National 
Correct Coding Initiative (NCCI) guidelines.
• In fact, the NCCI was actually made with the aim of 
promoting proper coding practices in order to reduce 
errors like unbundling, but without the proper 
training (which can be pretty time-consuming if 
you’re running a small practice and have all your 
physicians are occupied with other things), it can still 
end up being difficult for your billing team to stay 
compliant.
• Unfortunately, though, there’s still the chance that a 
healthcare provider is intentionally unbundling in an 
attempt to increase reimbursement for medical 
services they’ve provided – billing for individual parts 
of a surgical procedure rather than using the 
appropriate bundled procedure code (which would 
    end up leading to higher payouts), for example.
• It goes without saying that this is a pretty unethical 
practice, but most importantly, it’s completely illegal 
and could result in severe penalties.
Impact of Unbundling on 
Medical Practices
• If one of your claims is identified as unbundled, 
there’s a fairly strong chance that it’ll be denied by 
insurance companies – not only delaying payments
 but also hurting your cash flow, which can obviously 
be pretty catastrophic if you’re a small
    thing, but if you’ve repeatedly been caught 
unbundling, it can result in the following:
• Audits
• – Fines
• – Possible legal action
• – Damage to your practice’s reputation and 
financial standing
• Of course, honest mistakes can happen, but it’s 
entirely your responsibility for the accuracy of 
your own medical billing, so just ensure that 
you’re using the correct CPT code each time if 
you want to avoid any kinds of compliance issues.
How to Avoid Unbundling
• Naturally, you’re going to need to have a fairly 
thorough understanding of the CPT coding 
system and the NCCI guidelines in order to avoid 
unbundling, so there are a few things you can do 
to give yourself a fighting chance:
•  – Training your billing staff regularly
•  – Conducting regular audits of your billing 
practices
•  – Reviewing medical records to spot any 
potential issues before they escalate.
Consider Partnering with 
PMN
• Tools like EHR systems can be useful when checking for 
bundled codes, as they notify you if separate claims for a 
bundled service are submitted. That said, technology 
alone is definitely not enough here, so it’s paramount 
that you combine technology with human expertise so 
you can properly ensure your coding is not only accurate 
but fully compliant with guidelines like the NCCI.
• This is an area where partnering with a leading medical 
billing company like PMN can be a huge relief for your 
practice! Our medical billing experts have been handling 
the billing processes of small practices in California for 
    20+ years, so we’re well-equipped when it comes to 
eliminating medical coding errors like unbundling.
• Furthermore, our team is trained to correctly apply 
CPT codes for every procedure your practice makes – 
even for more complex cases involving multiple 
medical services provided to the same patient – not 
to mention that we’re also on the lookout for any 
changes in the CPT coding system. As such, you’re 
not only getting accurate claims but can avoid costly 
denials and delays, too.
• Ultimately, we’re here to take all the administrative 
burden of billing off your shoulders so that you and 
the limited number of physicians you have can get 
back to treating your patients directly.
• If you’d like to hear more about the range of services we 
can provide your practice – from managing medical bills 
to ensuring compliance with coding rules – make sure 
you contact our team today by giving us a call at
 (949) 215-5055. Alternatively, feel free to book an 
appointment if you’d prefer an in-person chat at our 
office in Laguna Hills, Orange County, California.