Overcome Claim Denials
Claim Denials are Challenges for Healthcare Providers
Even healthcare providers who deploy safeguards to dodge insurance payment hazards, occasionally find themselves up against a claim denial. Taking care of denied insurance claims can be a frustrating process for healthcare practitioners and their office staff.
That’s why it’s vital to utilize a claim denial management strategy to recognize, solve, recover and avoid denied claims. The more you wait to resubmit denied claims, the higher the odds you won’t recoup the full amount from the insurance payor or worse, you won’t get paid at all!!
According to Change Healthcare, claim denial rates in the healthcare industry are anywhere from 5 to 15%. The good news is that nearly 90% of denials are preventable.
What is a Denied Claim?
Medical claim rejections and denials are often used interchangeably. However, there is a clear-cut difference. Before we get into a claim denial management strategy, it’s best to recall the basics of what a claim denial means to your practice.
A rejected claim includes one or more errors and doesn’t meet explicit formatting, billing and coding criteria and data necessities.
Since a rejected claim has never been handled by a clearinghouse, insurance payor or the Centers for Medicare and Medicaid Services, the claim is simply treated as not received, and it didn’t make it through the adjudication system. Once the errors are corrected, the claim can be resubmitted.
A denied claim is lost or deferred revenue. The claim has been received and handled by the insurance or third-party payor, but it has been judged unpayable.
Payors will send you an Explanation of Benefits (EOB) or Electronic Remittance Advance (ERA) that details why the claim was denied. Obviously, before you resubmit the amended claim, you need to discover why the claim was denied and correct the errors.
Why are Claims Denied?
Denials fall into two big buckets: hard and soft. Hard denials can’t be reversed or corrected and will result in lost or written-off revenue. Soft denials are temporary with the possibility of being paid if the provider amends the claim or submits further information. Here are the top reasons for medical billing denials, according to an American Medical Association National Health Insurer Report Card.
- Missing information. Leaving just a single mandatory field blank on a claim form can generate a denial. Demographic and technical mistakes, which might be a missing modifier, the incorrect plan code or no Social Security number, trigger around 60 percent of medical billing denials and make up over 40 percent of denial write-offs.
- Claim or service duplicates, or claims resubmitted for a single encounter on the same date by the same provider for the same beneficiary for the same service item are among the principal explanations for Medicare Part B claim denials.
- Service previously adjudicated. This error takes place when benefits for a specific service are included in the payment/allowance for another service or procedure that has already been adjudicated.
- Not covered by payor. Medical billing denials for services not included under the patient’s most recent benefit plans can be avoided by examining details in the insurance eligibility response or calling the insurer prior to dispensing services.
- Limit for filing expired. Most payors require medical claims to be submitted within a particular number of days of the service or procedure.
Other reasons claims are denied include:
- The patient failed to update you about a change to their insurance. As such, the claim was denied since the patient is no longer covered by the insurer you have on file.
- Your claims management staff erroneously entered a portion of the patient’s information when filing the claim. Even something as simple as inverting two numbers in a patient’s ID number can bring about a denial.,
- Insurers may also deny claims on the basis that the “medical necessity” of services has not been properly demonstrated.
What Must a Provider do to Properly Handle Claim Denials?
- Cautiously look over all notifications concerning the claim. When you receive an explanation of benefits or similar notification relating to a claim, review it thoroughly. If the notification isn’t clear-cut, contact the carrier for additional information. You may well discover that your submission process doesn’t match the insurer’s requirements, but that you can make some minimal adjustments to streamline any future submissions.
- Be persistent. If your resubmitted claim is denied and you feel the denial was inadequate, you can appeal the decision. Be sure you know precisely what information you must have to submit your appeal again. Bear in mind that appeal procedures may differ by insurer and state law.
- Don’t delay. Become familiar with the insurer’s appeals procedure. This way you’re in a better position to reply. Maintain a record of existing information and appeal processes for each insurer with whom you work.
- Keep records of disputed claims. Maintain a copy of all the information you obtain from the insurer, including the name of the agent with whom you spoke. These records can perform a role in impending actions, to include bringing your appeal to higher authorities, submitting grievances to the state insurance commissioner or engaging in litigation.
- Remember that help is available. If you continue to contend with problems, contact your state insurance commissioner’s office for help.
From patient eligibility verification to implementing quality checks, submitting the insurance claim document to your insurance providers and keeping informed about every move in the process, the professionals at Medwave will insure you claims are progressing through without a glitch to guarantee revenue into your account. We wrote a previous article on How to Prevent (Denied Medical Claims).
Medwave provides credentialing and medical billing to varying amount of healthcare providers. Our team of professionals help providers greatly lower their claim denial rate, enabling them to make more money.
