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Do You Have a Claim Rejection or Denial?

A huge threat to receiving timely healthcare reimbursements are the dreaded claim rejections and claim denials. In addition, these are two phrases often used interchangeably in healthcare billing circles that shouldn't be because they hold two different meanings. Understand the difference and adjust your workflow to reduce double work.  

Claim Rejections

Claim rejections refer to submitted medical claims not meeting the proper formatting or data requirements suggested as guidelines by the Centers for Medicare and Medicaid Services (CMS). Insurance companies cannot process these because they never enter them into their computer systems. This screening process used by insurance carriers turns away improperly coded and entered claims as soon as possible in the workflow. If not technically received by the insurer, the claim is not processed. Most practices today utilize a clearinghouse and have claim edits set up in their practice management system to reduce the likelihood of rejections. Quickly correcting errors and resubmitting for insurance processing should be at the top of daily tasks.  
Improve efficiency in this stage by consistently trending, analyzing, and tracking what the top rejections are and by which payers. You will begin to see patterns that can be used to fine tune your system, improving first pass clean claim rate. Additionally, this information can be packaged into great training topics and discussion to progress knowledge. Be sure information is shared with all vested parties so everyone is on the same page! 
 
Claim Denials
 
Claims received and processed by the payer where payment is denied because a negative judgement about the claim was made are claim denials. The provider has decided they will not pay the claim. 
This type of claim cannot be easily fixed and quickly resubmitted for payment. They need to be researched (by the provider or a third-party administrator) to ascertain the reasons for the denial. Then an appeal or reconsideration of the case must be prepared before resubmitting it. In fact, if a claim denial is resubmitted without an appeal or request for reconsideration, it will probably be denied as a duplicate. If your team receives a duplicate claim denial, it means the claim was already resubmitted and a decision previously rendered. Your denial management team should be digging deep to uncover the cause of the original denial! Remember, the true test is not the quantity of claims touched/worked but how many were accurately closed/paid.  
The American Medical Association's National Health Insurer Report Card (NHIEC) publishes metrics on claims processing including the top five major reasons for denials:
  • Claim is submitted after the insurer's deadline for filing.
  • Claim was adjudicated and the same one was received again. 
  • Incorrect or missing data necessary to process the claim.
  • Services not meeting the carrier's plan policy guidelines or not covered.
  • Procedures submitted separately that were already included in another service or treatment.
Improving Claim Denial / Rejection Rates
  • Ensure automated software is up to date with payor guidelines both at local and national levels.
  • Enlist vendors to optimize your system for specifics you have with your specialty to mitigate additional labor on the back end to rework claims.
  • Perform routine chart audits to catch trends.
  • Track and analyze the reasons for claim denials and rejections; adjust the workflow accordingly. 
  • Educate the staff on how to quickly handle denials and rejections by knowing what to look for and how to respond. Make it a priority.
  • Collaborate with payers to adjust contract requirements that lead to denials that are regularly reversed on appeal. If you are tracking your denials, you have the data at your fingertips!

Success Stories


Average bill age when our office received: 180 days plus BALANCE: $ 1,233.00 PROBLEM: Claim denied needing primary EOB. SOLUTION: Claim billed to supplemental policy instead of MMAI policy which was effective for service date.
Average bill age when our office received: 180 days plus BALANCE: $ 2,176.00 PROBLEM: Claim denied because of no insurance coverage for service date. SOLUTION: Claim was filed to incorrect claims address.
Average bill age when our office received: 180 days plus BALANCE: $ 1,013.50 PROBLEM: Claim denied because of insurance ID mismatch. SOLUTION: Claim filed to traditional plan vs. community care.
Average bill age when our office received: 180 days plus BALANCE: $ 1,203.00 PROBLEM: Patient disputed charge/balance owed, comparing it to a similar past bill. SOLUTION: Explained itemized charges and balance owed because of deductible. Patient stated first time someone took the time to explain and set up a payment plan.
Average bill age when our office received: 180 days plus BALANCE: $ 1,007.50 PROBLEM: Denied by hospice as non-eligible benefit and Medicare as ID name mismatch. SOLUTION: Verified/corrected Medicare ID, name and date; confirmed hospice non-eligibility.
Average bill age when our office received: 180 days plus BALANCE: $ 1,305.00 PROBLEM: Denied no pre-authorization for service. SOLUTION: 3-way call with patient and insurance. No ER report on file when claim originally submitted. ER report since received.
Average bill age when our office received: 180 days plus BALANCE: $ 1,001.50 PROBLEM: Denied with "misrouted" and "claim not covered by payor". SOLUTION: 3-way call with patient and insurance. Claim was related to mental health so should have been filed through carve out policy.
Average bill age when our office received: 180 days plus BALANCE: $ 1,755.00 PROBLEM: No response from insurance after requested records submitted. Patient stated insurance paid. SOLUTION: Billing office did not receive/post insurance payment. Called insurance and records received but claims representative had not released for processing.
Average bill age when our office received: 180 days plus BALANCE: $ 4,540.50 PROBLEM: Multiple bills, same service dates as claims already paid. Denied due to no pre-authorization for service. SOLUTION: Call to insurance who verified no pre-authorization requirement. Two claims not found. To prevent duplicate denial upon resubmission, account rep notated resubmission for return transportation trip. Proof of timely filing submitted with claims.
Average bill age when our office received: 180 days plus BALANCE: $ 1,180.00 PROBLEM: Denied due to no pre-authorization for service. SOLUTION: 3-way call with patient and insurance. Claim should have been sent directly to IPA vs. umbrella insurance location.
Average bill age when our office received: 180 days plus BALANCE: $ 1,117.00 PROBLEM: Unpaid due to incomplete demographic information. SOLUTION: Contacted pick up and drop off locations. Sent release to obtain information and patient’s name misspelled.
Average bill age when our office received: 180 days plus BALANCE: $ 1,605.00 PROBLEM: Denied due to medical necessity. SOLUTION: 3-way call with patient and insurance. Spoke with multiple reps and received different answers including claim not found. Claim was found with no response from medical board. Patient had to submit medical records.
Average bill age when our office received: 180 days plus BALANCE: $ 1,007.50 PROBLEM: Denied multiple times as duplicate. SOLUTION: Located claim number ID, amount paid and date paid. Claim had already been paid in full but not posted.
Average bill age when our office received: 180 days plus BALANCE: $ 1,650.00 PROBLEM: No insurance on file. SOLUTION: Pick up location was state prison. Located inmate ID and could be billed to prison insurance as still within timely filing limits.
Average bill age when our office received: 180 days plus BALANCE: $ 2,295.50 PROBLEM: Denied as “forwarded to another entity for processing”. SOLUTION: Called insurance for medical group processing information. They did not have claim on file. Resubmitted with proof of timely filing.

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RMK Holdings Inc.

111 North Avenue
First Floor, Suite 104
Barrington, IL  60010

866-446-4800 toll-free phone

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