The Roadmap to Profitability - Tips on How to Avoid Claim Denials

Introduction 

The Medical Group Management Association (MGMA) has conducted thorough research pertaining to claim denials, and they uncovered some real eye-opening statistics. In fact, did you know that approximately 65 percent of denied claims are never resubmitted? One factor is because for each claim that is resubmitted, the medical practice has to pay about $25 (and if you are resubmitting multiple claims, that number can really add up).

When it comes to denied claims, it is important to research the denied claim, correct it, and resubmit the claim within the timeframe required by each payer (most can be as short as 90 days). Because failure to resubmit the denied claims could result in you not being paid for the services that you have rendered to the patient.

Aside from providing high-quality care to your patients, one of your goals should also be to increase your practice’s revenue so that your medical practice can survive and thrive. Having your own medical practice is like running a business, you have to keep the money rolling in so that you, as a provider, can continue providing your services. And look, sometimes errors and mistakes happen, and that’s okay from time to time. However, you have to make sure that you manage and control those errors and find ways to prevent them from happening again. And claim denials are errors that should always be addressed - because if you don’t address them, the consequence is that you will definitely not get paid.

Why are some claims being denied?

As mentioned above, errors happen from time to time. As a medical practitioner, you have to understand why some claims are denied, that way you can prevent future claims from being denied. 

And it is very important that you and your staff understand the most common reasons that claims are denied. They fall into five categories, each with sub-categories of their own.

1. Registration-related errors: If you fail to collect accurate patient data and verify insurance coverage, this will definitely lead to a denied claim due to:

Ineligibility - Some patients aren’t eligible for your services because their health insurance coverage has ended. Make sure that your staff first verifies a patient’s eligibility. Also, be sure that the patient’s information matches your data. And always ask for an updated copy of their insurance card every time they visit.

Data entry errors - Common errors such as a misspelled name or wrong gender can be the reason that a claim is denied. As a solution, you can use a claim scrubbing software or hire someone who can triple check your claims to make sure they are correct and ready to be submitted.

Non-covered service - Not all services are covered by all insurance companies, and not all services are included under the plan’s benefits. Always verify a patient’s benefits information before providing a service. Also, make sure that the patient has not exceeded the number of allowable sessions. You can always prevent registration-related errors. Your front desk staff, or any medical billing company that you hire, needs to gather the correct patient data before or during patient registration. It is important that they always verify eligibility and benefits before the scheduled appointment of a patient.

    2. Missing authorization: To avoid your claims from being denied due to failure to provide authorization, be sure to obtain authorization for any procedure that requires you to do. Do not forget to determine whether the in-office services that patients commonly receive during appointments require a prior authorization.

   3. Coding errors: There are a ton of code combinations, which makes coding systems such as the Current Procedural Terminology (CPT) and International Classification of Diseases (ICD) very complex. Because of their complexity, it is not surprising that coding errors can lead to claim denials.

  4. Some common coding errors include:

• Using the incorrect procedure code
• Missing or misused modifiers
• Using the code for nurse visit instead of another service code
• Failing to link diagnosis codes to CPT codes
• Using outdated CPT codes
• Non-specific codes

1. Medical necessity: Medical necessity is defined as the need for an item or service that is necessary for the diagnosis or treatment of disease, injury, or defects. They are appropriate for the symptoms, diagnosis or treatment of the patient’s condition, illness, disease or injury. When claims get denied because of medical necessity, it is because of improper documentation.
   
   
2. Billing/filing errors: Claims can be denied because of missing information, claims not filed on time, and duplicate claims.

Manage and prevent denials

Here’s what you can do to manage and prevent medical claim denials moving forward:

• Communicate better with your staff

You should meet with your front desk staff and your medical billers to talk about issues that pertain to claim denials. Every single person working in your clinic should learn how to document and capture all necessary charges to support optimal billing. Great communication with each other is always the key to a successful medical practice.

• Training

Before deploying your staff, make sure that they are knowledgeable about submitting claims. Train your staff to always gather pertinent patient information and complete claim forms accurately. Or, you can always outsource and hire people who are already knowledgeable and experienced claim submitters to ensure that your practice submits clean claims.

If your staff are all (if not all, then most) highly-trained professionals, claim denials will decrease. Not only will you get paid on time, but you will also boost your bottom line!

• Appeal denials

Despite putting in all that effort, some claims will be denied. When that happens, take measures to resolve the denied claim.

First, you have to identify the reason that the claim was denied. Then, you have to follow an action plan to resolve the denials, such as directly routing denials to the appropriate person and creating a standard workflow. Once identified, you can use a checklist on what to do and what not to do during denial management. Here’s a quick rundown:

1. Don’t delay taking care of the denied claim, because you can resubmit it within the timeframe that the insurance company gives you.
   
   
2. As much as possible, avoid automatic re-billing because this can cause duplicate claims and duplicate denials. With duplicate denials, your medical billers will be spending a lot of time figuring out whether the denial you submitted was legit and whether the claim has already been paid.
   
   
3. Do build your case by preparing a professional letter that describes your case for an appeal. And always include proof of documents to support your appeal.
   
   
4. Do work with an expert. If possible, seek professional help and have them review your appeal.
   
   
5. Do engage with the patient by sending a copy of your appeal to your patient. When patients get worried about whether or not they have to pay for the service themselves, they will most likely call their insurance company. Your appeal will have a higher chance of being considered if both you and your patient are involved in the case.

Aside from training your staff yourself, you can always choose to hire people who can help you with your claim denials. Hiring more staff could end up being costly. So, you should consider outsourcing experienced billers to help you increase your revenue by helping you decrease your claims denials. Outsourcing is cheaper and doesn’t require any additional office space to be occupied in your practice.

DrCatalyst can help you with your denied claims. Our team has a vast set of services that can help manage your medical practice such as physician medical billing services, prior authorization processing, remote phone assistance, and so much more. To learn more about how we can help your clinic, book a free consultation today!

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