How To Handle Medical Billing Claim Denials With Ease?

In today’s healthcare marketplace, many providers are facing numerous challenges with medical billing claim denials. Providers should aim to keep their claim denial rate around 5 percent to ensure their organization is maximizing claim reimbursement revenue as it affects the physician practice and cash flow.

To overcome the challenges with the claim denial, it is important to understand the common reasons for claim denial. In this blog, we clearly explain everything about medical billing claim denials and its challenges.

What is Claim Denials In Medical Billing?

Denied claims are defined as claims that were received and processed (adjudicated) by the payer and a negative determination was made.  This type of claim cannot just be resubmitted. It must be researched in order to determine why the claim was denied so that you can write an appropriate appeal or reconsideration request.

If you resubmit this type of claim without an appeal or reconsideration request it will most likely be denied as a duplicate, costing you, even more, time and money the claim remains unpaid.

Major Reasons for Medical Billing Claim Denials

1. Duplicate Claims

A duplicate claim is one that’s resubmitted for a single encounter on the same date, by the same provider, for the same beneficiary, for the same service or item. It’s denied as a duplicate with error code CO18. Duplicates are one of the largest reasons for Medicare Part B claim denials, According to the Government Accountability Office (GAO) study its as much as 32%. CMS notes, however, that claims rejected as duplicates may be valid claims for payment if the correct condition codes or modifiers are applied to demonstrate a claim isn’t really a duplicate.

2. Insufficient Medical Necessity

Sometimes an insurer won’t pay for a procedure it believes to be medically unnecessary. These can be difficult situations for all parties, but you may be able to avoid them. In any case, where medical necessity isn’t clear-cut, good communications among clinicians, medical billing staff, insurers, and patients is essential so everyone makes informed decisions.

When a claim is denied due to medical necessity, your practice could be forced to either absorb the cost of the services or attempt to collect the entire payment from the patient, neither of which are good options.

3. Use of Out-of-Network Provider

Insurer networks can change from year to year, and patients may not realize this, or that changing insurance companies may change which medical providers they can see and receive full benefits.

Ascertaining patient insurer information at the first opportunity (during appointment booking or registration) can allow your billing staff to determine whether your practice belongs to a patient’s insurer network, and if not, what sort of benefits (if any) the patient can expect. Again, your medical billing software can assist with this by keeping you apprised of which networks your practice belongs to.

4. Incorrect Patient Identifier Information

Patient identifier information is the most important one to submit a medical claim with precise patient identifier information that helps the health insurance company to find the patient’s health insurance plan to make payment.

Most of the claims denied because of inaccurate patient identifier data are:

• Incorrect subscriber or patient name
• Incorrect subscriber or Patient’s date of birth
• Incorrect subscriber numbers
• Incorrect subscriber group number
• Insurance ineligibility

5. Missing or Invalid CPT or HCPCS Codes

For the medical claim process, the healthcare industry uses standard codes to point out services and procedures. This coding is called Current Procedural Terminology (CPT) or Healthcare Common Procedure Coding System (HCPCS). These codes change frequently. So it is important to ensure whether your medical coder stays up to date with revised codes.

Tips To Avoid Medical Billing Claim Denials

Adding more people to the healthcare claims management team won’t necessarily help reduce or prevent denials unless they know what to focus on. The following should be part of any sound denials management plan:

1. Quantify and categorize denials by tracking, measuring, and reporting trends by doctor, department, procedure, and payer. Technology and analytics are essential to reliable business intelligence, but they are well worth the time and investment.
2. Create a task force to analyze and prioritize denial trends, determine what resources are needed to implement solutions, and track and report progress.
3. Improve patient data quality at registration, which is the source of many errors and, ultimately, denials.
4. Avoid incorrect assumptions and determine the true reasons for denials by going beyond generic coding explanations and performing root cause analyses.
5. Develop a denials prevention mindset in all parts of the revenue cycle, including patient accounting, case management, medical records, coding, contracting, compliance, and patient access.
6. Optimize claims management software to help ensure edits are functioning, current, and improving your clean claims rate. Your vendor should provide clean claims rate data regularly and tips to improve it customized to your organization.
7. Use automated predictive analytics to flag potential denials and address them before claims are submitted.
8. Work with payers to eliminate contract requirements that often lead to denials overturned on appeal. Again, data analytics can help identify trouble spots and support negotiations.

Final Thoughts

The medical billing claim denial is the most significant challenge for a physician’s practice today.  Focusing on submitting cleaner claims may also be the key to overcoming many major claims denial management challenges.

VOZO medical billing software helps in tracking and processing claims and connects your billing and documentation to ensure accurate claim submission without any errors promptly. The billing systems help to increase data accuracy and speed up the claim submission process so you can get paid quickly and provide accurate bills for your patients.