Healthcare organizations are focused on providing the best possible patient care. However, it is essential for every hospital and medical practice to establish effective processes and policies to maintain financial well-being. This is where success with claim submission plays a crucial role. Unfortunately, hospitals and practices are experiencing an increase in denial rates, with average claims denial rates reaching 10% or more, which has risen more than 20% over the past five years, according to a 2021 RevCycle Intelligence, report. Outsourcing revenue cycle management (RCM) to a competent medical billing company can help healthcare providers balance finances and patient care. Experts can help you establish solid strategies to consistently achieve success with claim submission.
RCM involves managing both administrative and clinical functions related to claims processing, payment, and revenue generation to help providers collect patient service revenue. Success with claim submission depends on submitting clean claims to insurance companies. Providers must have a clear understanding of what constitutes a clean claim.
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What is a “Clean” Claim?
For a claim to be considered “clean,” it must be submitted to the payer within the designated timeframe and contain all of the required information in the appropriate format. Clean claims conform to the expectations and policies of the payer.
The Department of Insurance and Financial Services (www.michigan.gov) lists the requirements that a clean claim must fulfill as follows:
- Identifies the health professional, health facility, home health care provider, or durable medical equipment provider that provided service sufficiently to verify, if necessary, affiliation status and includes any identifying numbers.
- Sufficiently identifies the patient and health plan subscriber.
- Lists the date and place of service.
- Is a claim for covered services for an eligible individual.
- If necessary, substantiates the medical necessity and appropriateness of the service provided.
- If prior authorization is required for certain patient services, contains information sufficient to establish that prior authorization was obtained.
- Identifies the service rendered using a generally accepted system of procedure or service coding.
- Includes additional documentation based upon services rendered as reasonably required by the health plan
Only claims that meet these requirements and are submitted in a timely manner will be paid. However, conforming to the expectations and policies of the payer is not easy given that those expectations are different for every payer. Furthermore, payer requirements are becoming exceedingly complex. This is leading to rejections, denials, claims reimbursement issue, and lost revenue.
Let’s take a look at how practices can submit clean claims the first time.
Five Ways to Achieve Success with Claim Submission
Typically, when a practice create a claim, that claim is sent to its RCM system, a clearinghouse, or a chargemaster system to ensure it is properly formatted for that plan, delivered to the right place and optimized to ensure the best reimbursement. Having the following measures in place can ensure submission of clean claims:
- Check patient demographics and verify insurance eligibility: To minimize the risk of claim rejections, it is crucial to review patient demographics and insurance eligibility before submitting a claim. Incorrect or missing patient information is a common reason for claim denials. Patient demographics should be regularly verified during each visit, while insurance eligibility should be confirmed before the initial visit and all subsequent visits. Insurance coverage should also be verified if there has been a recent change or at the start of a new month. Best practice involves verifying eligibility at multiple stages such as creating a patient record, adding insurance details, and scheduling appointments.
- Perform claims scrubbing: This is a critical step to reduce rejections. The claims scrubbing process involves using specialized software to review medical claims before they are submitted to insurance payers. Claims scrubbing software can identify and correct errors or potential issues that could cause claim rejections, denials or delays, such as:
- CPT codes inconsistent with the patient’s age or gender
- Add-on codes that require a primary CPT code
- Invalid or deleted CPT and Diagnosis codes
- Diagnosis codes that don’t support medical necessity or meet specificity requirements
- Improper unbundling
- Invalid modifiers
By scrubbing claims before submission, healthcare providers can identify and fix missing or incorrect information, coding errors, and other issues, and submit clean claims. This will improve their reimbursement rates and reduce the time and resources spent on reworking denied claims.
- Pay special attention to documentation and medical coding: Accurate coding can increase the likelihood of an approved claim. Partnering with an experienced medical coding company is the best way to ensure that claims are submitted with the correct codes for medical diagnoses, procedures, and services provided to patients. Inaccurate or incomplete codes can lead to claim rejections or denials, and loss of revenue. On the other hand, accurate coding, which an essential aspect of medical billing, can increase the likelihood of an approved claim and ensure that providers receive payment for the services they have provided. Accurate coding also helps to ensure that patients receive the appropriate level of care and that their medical records accurately reflect their health status, which can have implications for their future care.
- Proactive denials management: According to reports, as much as 65 percent of denied claims are left unsubmitted, resulting in a loss of revenue. Healthcare providers must take action to adjust, appeal, or reopen denied claims if there is a valid reason to do so. To reduce the number of claim denials, healthcare organizations should first identify the root causes and then simplify the appeals process and implement effective preventive measures. They should focus on correcting common hidden causes of denials. Many patient-related rejections can be prevented with the right expertise and support to handle appeals and reduce recurring front-end rejections.
- Improve the payer enrollment process: The most significant impact on a practice’s revenue can come from rejections related to credentialing and enrollment. Failure to understand how providers are credentialed with payers can result in improper enrollment with the clearinghouse, preventing claims from reaching payers within the required filing deadlines. Credentialing involves proving that a provider has the necessary qualifications to treat patients, including documentation of education, specializations, and additional training. After credentialing, providers must enroll in health insurance networks. Clearinghouse enrollment cannot be completed until payer credentialing and provider enrollment are finalized. Rejections related to credentialing and enrollment may occur within practice software or at the clearinghouse, and claims may even reach the payer and still be rejected. To avoid these issues, practices should review original paperwork submitted to each payer and ensure that practice, provider, and payer information is accurately set up in their software, and clearinghouse enrollments are completed correctly the first time.
Ensure accuracy and save time by outsourcing your medical billing and coding to OSI.
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Medical billing outsourcing to an expert is a practical way to ensure that all of the above-mentioned steps are in place. An experienced medical billing company will have all the resources necessary to help practices manage their revenue cycle and succeed with claim submission.
Julie Clements, OSI’s Vice President of Operations, brings a diverse background in healthcare staffing and a robust six-year tenure as the Director of Sales and Marketing at a prestigious 4-star resort.