One of the biggest banes of healthcare revenue cycle management; denied claims are a major source of stress for healthcare facilities and have an adverse impact on the cash flow and net revenue for the facility. But before we start blaming the payers for these denials, let us look at the common reasons for claim denials.
A duplicate claim was submitted when a practice hasn’t received reimbursement.
Errors or typos were made while collecting pertinent information from the patient or during the data entry process for a claim.
The service won’t be reimbursed because the patient hasn’t yet met their insurance plan’s deductible.
Health plan benefits exceeded
The patient has exceeded his or her health plan’s benefit for the provided service.
The claim is deficient in certain information. It may be missing a prior authorization or the effective period of time within which the service must be provided for reimbursement to occur.
Problem with modifiers
The claim form is missing a modifier or modifiers, or the modifier(s) are invalid for the procedure code.
Site of service problem
An inconsistent site of service is marked on the claim form, such as an inpatient procedure billed in an outpatient setting.
Coding mix up
There is a coding or data error with mismatched totals or codes that are mutually exclusive.
The claim includes outdated current procedural terminology codes, or it lists deleted or truncated diagnosis codes.
Service not covered
A particular service isn’t covered under the health plan’s benefits.
Lack of medical necessity
The health plan could deny a claim if it appears that a service was not medically necessary, or if there is a mismatch between the actual diagnosis and the service performed.
Out of network
When the physician isn’t an in-network provider for the patient, the payer may reimburse a lesser amount if the patient has out-of-network benefits.
No matter how efficiently you work to make the claims perfect, denials will still happen. Insurance companies have an economic incentive to deny claims, so healthcare facilities are never going to get it down to zero. However, a strong parallel strategy of denial prevention and follow up can reduce the claim denial rate significantly, while also ensuring that most of the denied claims get paid on appealing.
To minimize denials, it is important to set up a system that everyone on your staff understands and follows. If you do not have the in-house capabilities, then a medical billing company may be your best bet. This would help prevent medical billing errors while at the same time you will not have to extend the services of your staff, in the process burning them out and increasing the chances for errors, which would subsequently result in more denials.