Claim denials are not something new for any medical practice. However, understanding the cause of claim denials and actively working on them are important to ensure appropriate reimbursement for services rendered. Major reasons for claim denials are – patient eligibility issues, invalid medical codes, expiration of time limit for filing claims or even lack of appropriate documentation.
Experienced medical billing and coding companies use proven denial management strategies to enhance the revenue cycle. It is an ongoing procedure to prevent unpaid claims that result in lost revenue.
Tips to Reduce Claim Denials
- Track the denial data and take action – Measure the denial data frequently and try to eliminate reason for the denial. There are three options to respond to the denial.
- Appeal the denial. It is recommended to develop appeal letter templates for the most common denial reasons. Scan documents such as operative reports and office notes and attach them to the appeal letter. If the payer denies authorization for treatment or post-treatment, an immediate telephone consultation can be required.
- Respond to the payer’s request by supplying additional information or correcting invalid entries.
- Bill the next responsible party, the second insurer or the patient or guarantor.
Doctor’s office should make sure to track details such as – percent of claims denied on initial submission, exact reasons for denial, time lag between date of denial received and date the appeal was sent out and percent and dollars of reworked claims that are paid and those that are written off.
- Know your payer’s reimbursement policy – A clear idea about the reimbursement policy will help practices to know when a denial is likely and what kind of information you can provide to get it paid. For inevitable denials, print the initial claim to paper and attach a letter of support for your claim.
- Obtain prior authorization – It is the responsibility of the physician’s office to obtain the prior authorization. Even before consultation with the doctor, it is crucial that the staff should collect details such as insurance information, including the carrier, ID number, and group number. They should also contact the carrier to make sure the patient’s plan covers the service they need, and find out if the carrier requires pre-authorization or a referral. Don’t just copy the patient’s insurance card. Take the time to verify that she is still covered under that plan.
- Use accurate medical codes – Simple coding errors occur often, where outdated or wrong codes are used to identify the service instead of the correct one. Tendency for mistakes is also more with the ICD-10 transition.
Professional medical billing company will have a denials management team which includes expert medical coding and billing specialists and process managers, who are proficient in analyzing data and creating reports, and have a better understanding about the coding standards and current billing updates.
Rajeev Rajagopal, the President of OSI, has a wealth of experience as a healthcare business consultant in the United States. He has a keen understanding of current medical billing and coding standards.