"Is there some kind of rule where if 3 or more people cannot read a note it is considered unbillable?"
Personally speaking, I have never read a rule/reg requiring this. If documentation is illegible, this will have a direct effect on the reviewer's ability to make a fair determination on the overall review process. If documentation is illegible, it's impossible to support medical necessity for the services and define what service was performed. I've had repeat offenders for this very problem and dictation was, normally, the solution. The provider still needs to review what actually prints out on his dictated note. It really boils down to the old saying...."If it's not documented, it wasn't done". If I can't read it, then it's as good as not documented in my book.