7 Shocking Ways Medical Billing Errors Can Damage Your Credit Score (And How EHR Prevents Them)

Medical billing errors are more than just inconvenient. They can have long-term consequences for providers and patients alike. A little inaccuracy, such as a duplicate charge, coding error, or insurance processing delay, might result in an unpaid amount, which may have a negative influence on your credit score.

According to the Consumer Financial Protection Bureau, more than 15 million Americans have medical debt shown on their credit reports. 

An unpaid medical expense could reduce your credit score by 60 points or more. However, EHR systems are significantly changing medical billing to reduce the risk of these costly mistakes. 

With improved accuracy, automation, and seamless integration, EHRs help prevent billing mistakes before they become financial burdens. In this blog post, we have shared how Medical billing errors damage credit scores and how EHR helps to solve them.

How Medical Billing Errors Impact Credit Scores

Medical costs do not reflect on your credit record immediately. If a medical bill is unpaid for an extended period, it may be turned over to a collection agency. They then submit the debt to the credit bureaus.

A study discovered that up to 80% of medical bills contain mistakes. However, many people do not realize there is a problem until they notice the negative impact on their credit. Some common medical billing errors include:

• Incorrect coding leads to higher charges
• Insurance claim rejections due to documentation errors
• Out-of-network providers charging unexpectedly high fees
• Duplicate billing for the same procedure
• Miscommunication between healthcare providers and insurers

These errors increase the financial strain on patients and cause unnecessary credit damage. 

EHR systems help to avoid these problems by assuring billing accuracy, lowering claim denials, and enhancing communication between healthcare providers and insurers.

Related: 10 Proven Ways to Reduce Medical Billing Errors in 2025

7 Ways Medical Billing Errors Damage Credit Score (And How EHR Helps Prevent Them)

1. Unnoticed Billing Errors Can Lead to Collections

Minor coding errors, such as entering the wrong procedure code, might result in overcharges or insurance claim denials. If the problem is not detected in time, the bill may go unpaid and end up in collections.

Here is how EHR Helps:

• Automated coding verification reduces errors in billing codes.
• Integrated claim tracking ensures that insurance claims are processed correctly and on time.
• Error detection alerts notify providers before a bill is sent out with incorrect charges.

2. Duplicate Billing Can Inflate Debt

Patients frequently receive duplicate bills for the same treatment due to manual data entry errors. If they don’t understand the error, they may pay more than they should or fail to pay at all, believing the bill is incorrect. This will result in payment collection. EHR helps to:

• Automate the billing processes to detect and eliminate duplicate charges.
• Consolidated patient records ensure that services are only billed once.
• Billing reconciliation tools verify that charges are accurate before submission.

3. Insurance Processing Delays Can Hurt Your Credit

Insurance companies sometimes take months to process claims. Which can cause delays in payments. If a provider assumes the patient is responsible, they might send the bill to collections before the insurance payment goes through. Here is how EHR helps:

• The system has real-time claim submission that speeds up insurance processing.
• Automated insurance verification ensures that claims are submitted with the correct details.
• Claim status tracking allows providers and patients to monitor payment progress in real-time.

4. Miscommunication Between Providers and Insurers Can Result in Unexpected Bills

There are constant communication gaps between healthcare practitioners, insurance, and billing agencies. A patient may be billed improperly owing to missing insurance information or a clerical error. If not corrected in time, the bill can be sent to collections. Here is how EHR Helps:

• Centralized patient records ensure that billing information is always correct and up to date.
• Automatic claim validation helps to prevent confusion between providers and insurance.
• Integrated messaging systems enable billing teams to efficiently address claim disputes. 

5. Hidden Costs of Out-of-Network Providers

Patients may unintentionally receive care from out-of-network medical professionals. This ultimately leads to large medical expenditures that insurance does not fully cover. This unexpected debt often goes unpaid and negatively affects credit scores. EHR helps to:

• Pre-authorization checks ensure that services are covered before the procedure.
• Network verification tools alert patients and providers if a service is out of network.
• Transparent cost estimation helps patients understand their out-of-pocket expenses before treatment.

6. Administrative Errors Can Lead to Missed Payments

Sometimes bills never reach the patient due to incorrect addresses or administrative errors.  If a patient is unaware of an overdue balance, they cannot pay it on time. And it may end up in the final payment collection from patients. Here is how EHR helps:

• Automated patient notifications ensure patients receive billing statements via email, portal, or text.
• Billing reminders alert patients about unpaid balances before they become overdue.
• Patient portals allow real-time access to bills and payment options.

Changes in Medical Debt Reporting

A new CFPB rule prevents medical debt from appearing on credit reports when lenders analyze them. Patients are still responsible for paying any remaining balances, and delinquent payments may result in legal action. Here is how EHR helps:

• Transparent billing practices ensure patients understand their financial responsibilities upfront.
• Automated payment plans help prevent bills from being sent to collections.
• Insurance appeal assistance helps patients dispute incorrectly denied claims before they turn into debt.

Related: Are You Making These Common Medical Billing Mistakes? Fix Them In 2025

Vozo EHR Integrated with Medical Billing

Medical billing is a complex healthcare operation that requires efficiency and precision. Delayed payments, claim denials, and manual errors can slow your revenue cycle and affect cash flow.

With Vozo’s Cloud EHR solution, you get an integrated medical billing system that simplifies your billing process and enhances real-time claim tracking to improve payment turnaround.

How Vozo EHR Transforms Medical Billing:

• Streamline billing workflows and reduce administrative workload.
• Instantly identifies and corrects coding errors before claim submission.
• Speeds up claim verification with automated payer communication.
• Ensures compliance with built-in coding checks and regulatory updates.
• Offers real-time analytics and reporting for better decision-making.
• Minimizes delays by automating claims processing and payments.
• Reduces billing disputes with accurate, transparent invoicing.

Vozo EHR’s seamless integration with medical billing empowers healthcare providers to reduce errors, prevent delays, and optimize revenue cycles, all while focusing on delivering better patient care.