Difference Between Claim Denials and Claim Rejections
In the healthcare industry, obstacles are inevitable. Reimbursements in healthcare are not an exception. It has two main barriers — claim denials and rejections. Medical billing staff often use these terms interchangeably. In addition, the semantics of the two claims are confusing. Confusion can also lead to costly errors and can negatively affect the entire revenue cycle. That is why it is essential to educate and train the accounts of your staff. Streamlining the workflow will also help eliminate confusion and increase cash flow.
It is also prime to know the difference between claim rejections and denials so that you can follow up on non-reimbursed claims. Here, we will explain how the two types of claims differ and how you can prevent them.
What is Claim Rejection?
More often than not, claim rejections contain one or more errors found before the claim is processed. They are claims that do not comply with the criteria and are likely to be rejected. Rejections of claims are from coding errors, incorrect procedure code(s), or mistakes in a patient term policy. It could even be a simple transposition of a digit from the patient's insurance number. Indeed, medical documentation must be accurate and precise to avoid any rejections. These medical records allow healthcare professionals to verify reimbursements to payers when claims issued have problems.
If there are errors on claims, the reason could be that the software system didn't encounter data. On the positive side, you can submit medical claims again once the errors are corrected. These errors also prevent the insurance agencies from paying the bill. As a result, they will return the claims to the biller for correction. The time frame of resubmitting medical claims is also crucial. Payers have a set timeline in which claims must submit to be considered timely. However, a timely denial may occur if it's not filed along with the payer's conditions. The liability for this falls to the healthcare provider/s.
What is Claim Denial?
On the other hand, denials in medical billing are another set of problems. These are medical claims that payers receive and process but are named "unpayable." Mostly, these claim denials have errors or lack of Prior Authorization (PA). Denial issues are the following:
- Lack of Information - Denial of claims usually occurs because of missing information. There may be an error in a field, a missing social security number, or it may lack modifiers.
- Non-Covered Services - Payers do not cover these services. Most likely, these services will also get denied.
- Duplicate Claims for a Service - A duplicate claim is when the same service, provider, date, encounter, or beneficiary is submitted multiple times.
It’s not easy to resubmit a claim when these types of issues arise. We must determine the reason for claim denial. Once done, you can either write an appeal or ask for reconsideration. Denied claims that get resubmitted without an appeal or reconsideration request will still get a denial. Typically, this means that claim will stay unpaid and will cost extra funds for your medical practice.
Here are appropriate ways to prevent claim rejections and denials:
- File claims as soon as possible.
Make sure to manage your time in obtaining accurate billing information. Moreover, you can also double-check by asking the doctor about a code. Time is relevant in this case, so process claims as quickly as possible.
- Create a Claim Workforce
As the saying goes, “teamwork makes the dream work”. If you dedicate a team solely to claim management, your denials and rejections will reduce.
- Train your staff to improve patient data quality.
Educate your staff in monitoring data registrations for accuracy, consistency, and completeness. You can also implement new methods and practices so that they can efficiently offer high-quality patient data.
- Hire Medical Billing Service Firms
Medical billing service firms can be one of the most effective strategies for optimizing claims management in your practice. The outsourcing of billing and coding facilitates the reduction of rejection rates, denials, and revenue loss.
Partner with DrCatalyst
The confusion between claim denials and rejections might get out of hand. Thus, it can probably lead to a slow revenue cycle and an inefficient operation. If you worry too much about this burden, DrCatalyst is the best solution. Boost your practice's income with our medical billing and coding services. Schedule a consultation now!
