Denial of medical claims has been the biggest concern for physicians, doctors & other healthcare professionals. Recurring denials or increase in denials lead to operational losses which are difficult and sometimes impossible to recover. Denials fall into two big buckets: hard and soft. Hard denials cannot be reversed or corrected, and result in lost or written-off revenue. Soft denials are temporary denials with the potential to be paid if the provider corrects the claim or sends additional information. According to the American Medical Association’s National Health Insurer Report Card (NHIEC), that provides metrics on the timeliness, transparency and accuracy of claims processing of insurance companies, there are 5 major reasons for denied medical claims:
- Incomplete or missing information
Leaving just one required field blank on a claim form can trigger a denial. Demographic and technical errors, which could be a missing modifier, the wrong plan code or no Social Security number, prompt 61% of initial medical billing denials and account for 42% of denial write-offs.
- Duplicate claim or service
Duplicates, which are claims resubmitted for a single encounter on the same date by the same provider for the same beneficiary for the same service item, are among the biggest reasons for claim denials (up to 32%)
- Service already adjudicated
This error occurs when benefits for a certain service are included in the payment/allowance for another service or procedure that has already been adjudicated.
- Not covered by payer
Medical billing denials for procedures not covered under patients’ current benefit plans can be avoided by checking details in the insurance eligibility response or calling the insurer before administering services.
- Limit for filing expired
Most payers require medical claims to be submitted within a certain number of days of service. This includes the time it takes to rework rejections, whether the review was automated (system edits to check for improper coding or other mistakes) or complex (licensed medical professionals determining if the service was covered and was reasonable and necessary). Correcting inpatient medical coding errors, which accounted for 81% of complex claim denials in fourth quarter 2015, can cause delays that push medical billing past the deadline. Workflow practices should alert staff when medical claims approach the time limit.
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:
- 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.
- Create a task force to analyze and prioritize denial trends, determine what resources are needed to implement solutions and track and report progress.
- Improve patient data quality at registration, which is the source of many errors and, ultimately, denials.
- Avoid incorrect assumptions and determine the true reasons for denials by going beyond generic coding explanations and performing root cause analyses.
- 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.
- 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.
- Use automated predictive analytics to flag potential denials and address them before claims are submitted.
- 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.
Learn more about how Viaante’s Denial Management Services can help reduce denials. Visit www.viaante.com for more information.