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Top Methods to Avoid Claim Denials

The information below suggests reasons for and ways to avoid crippling your cash flow by effectively managing claim denials. The most common six reasons are:
 
Exceeded time to file limits: With so many payors (the average practice uses 13) and different filing timelines a deadline is easy to miss. Know what your payor time limits are so denial management and follow up can be completed well before a deadline.  
 
A lack of specificity: This occurs when the highest specificity level is not coded. It is an understandable issue since the ICD-10 procedures and diagnostic codes rose from 3,800 to 72,000 and 14,000 to 70,000! Failure to include all the required claim information will generate a denial.
 
Inaccurate claims data: Payors deny claims when the information submitted doesn't match what they have or if it is judged inaccurate. This is especially true with demographics. In fact, a recent study found that 61% of initial claim denials and 42% of denial write-offs occur because of missing or incorrect demographic information or technical errors.
 
Excluded services: Procedure or treatment restrictions that are not covered by the carrier but submitted as a claim are usually denied. Another common denial is billing separate services that should be billed under one code.  
 
More information: The follow up staff may need to contact the payor to determine what information is missing from a claim that has been denied for this reason.
 
Illegible claim: Manual claim forms may be impossible to read also resulting in a denial.
 
Avoiding Claim Denials
 
The best way to prevent denials is to avoid them in the first place. Below are two ways to do that.
 
Technology: Technology and third-party software can assist with preventing claim denials. Maximize your billing technology by setting up and maintain claim scrubbers and edits that can spot errors before a claim is released. Most of this software comes with standard edits from the National Correct Coding Initiative (NCCI) and / or basic medical necessity edits related to incorrect subscriber numbers, dates of birth, names, zip codes, and gender. Along with setting up standard edits, custom edit setup can capture local coverage determination factors and common payor errors your practices encounters. Errors can then be flagged and quickly corrected on the front end, shortening time to payment in the revenue cycle.
 
Staff Training: Since human error causes a significant number of denials, rigorous staff training can prevent them. The idea is to make sure every member of the staff, not just the claim coder, but billers, physicians and nurses know the role they play in producing an efficient claim for payment.
The claims process begins when the patient schedules an appointment. Another key area is a doctor's documentation. This must reflect the service and all the needed information to accurately code then bill the service or treatment performed. Coders then need to be trained to code to the highest degree of specificity based on the available clinical documentation. Set up an information sharing system so that queries can be addressed promptly. Additional documentation training will be beneficial when you notice a trend of the same query types for the same rendering professional. The key is to become accurate, yet efficient, in all areas.  
 
No matter how challenging the process or if you decide to outsource denial and claims management follow up due to resource shortage, practices gain a lot by keeping claim denial rates low.

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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