Claims denial refers to the rejection of a request for payment made by an insurance company to a policyholder or healthcare provider. This can occur due to various reasons such as lack of coverage, incorrect information on the claim, or policy exclusions. The denied claim may require the policyholder or provider to resubmit the claim with corrected information or to appeal the decision. As claims denial can lead to significant loss of revenue, denial management services have to be highly effective to put a stop to the losses.
Did You Know
Approximately 1 in 4 claims are denied by payers in the US. The top reasons for most claim denials include missing or incomplete information, prior authorization requirements not met, and services not covered by the patient’s insurance plan.
Examples of Claims Denial:
A patient goes to the emergency room for chest pain and is later admitted to the hospital for further treatment. The hospital submits a claim to the patient’s insurance company for the cost of the emergency room visit and hospital stay. The insurance company denies the claim because the policyholder did not preauthorize the visit to the emergency room. The policyholder must now appeal the decision or pay the full cost of the medical expenses out-of-pocket.
A patient visits a specialist for a medical condition but the insurance company denies the claim because the specialist is not in their network of approved providers. The patient may need to pay the full cost of the visit or seek treatment from an in-network provider to have the claim covered.
Did You Know
On average, it takes healthcare providers 33 days to resolve a denied claim, leading to increased administrative costs and potential loss of revenue.
Few Common Reasons that Lead to Claims Denials
Claims denial happen due to some common reasons. These include:
- Incomplete or inaccurate information on the claim form.
- Failure to meet the eligibility criteria or time limits for filing a claim.
- Inadequate documentation to support the claim.
- Pre-existing conditions not covered by the insurance policy.
- Not obtaining prior authorization or approval from the insurance company.
- Incorrect coding or billing errors, such as upcoding or misusing codes.
- Not following the insurance company’s guidelines or protocols.
- Not appealing the denied claim in a timely manner.
- Providing incorrect or false information to the insurance company.
- Failing to negotiate with the insurance company for out-of-network services.
Proven Ways to Make Denial Management Process Efficient
Ensure Medical Claims Forms are Filled Completely and Accurately
Providing accurate and complete information in claims forms increases the chance of your medical claim being approved.
To provide accurate information in a medical claims form, it is important to check the insurance policy of the patient and understand what is covered and what is not. You must ensure the patients personal information, including their name, address, and policy number is updated. While filling the form on services availed, provide complete and accurate information about the services received, including the date of service, type of treatment, and provider name and NPI number. Check for the correct use of service codes, such as CPT codes for medical procedures and ICD codes for diagnoses.
Claims forms are incomplete without correct documentation. Include all supporting documentation, such as lab results, radiology reports, and referral letters. Make sure to sign and date the form before submitting it to the insurance company. Once the claim form is submitted, your job is not over. Follow up with the insurance company to ensure that the claim has been received and processed correctly.
Did You Know
Nearly 40% of denied claims are never resubmitted, resulting in an estimated loss of $262 billion in potential revenue for the healthcare industry.
Always Seek Prior Authorization and Make the Process Fool-Proof
Prior authorization is an important process in denial management in healthcare. It helps to ensure that medical treatments and procedures are medically necessary and cost-effective. When a patient receives a medical treatment or procedure, the healthcare provider must first obtain prior authorization from the patient’s insurance company. This authorization ensures that the insurance company will pay for the treatment and that the patient will not be responsible for the full cost.
Insurance companies use prior authorization to determine if a specific treatment or procedure is covered under the patient’s insurance policy and if it is medically necessary. If the treatment or procedure is not covered, the insurance company will deny the claim and the patient will be responsible for paying the full cost.
Therefore, as a service provider, prior authorization can keep your practice on the safe side. By verifying you become doubly sure that you can carry out the treatment without any risk of payment default. However, despite having the best of processes prior authorization can go wrong for practices.
Making prior authorization fool proof requires a combination of steps and procedures to ensure that it is a smooth and efficient process. Here are some of the ways to make prior authorization fool proof:
- Automate the process to reduce errors and ensure that all necessary information is captured accurately. Electronic prior authorization systems can help to streamline the process, reduce wait times, and increase the accuracy of information.
- Standardize the prior authorization process to ensure that all requests are evaluated consistently and that the criteria used to approve or deny authorization requests are clearly defined.
- Establish clear communication between healthcare providers, insurance companies, and patients is essential to ensure that all parties understand the process and their respective roles.
- Regular monitoring and evaluation of the prior authorization process can help to identify areas for improvement and make necessary changes to improve the process over time. This can include gathering feedback from healthcare providers and patients to identify areas for improvement.
- Proper training for all parties involved in the prior authorization process is essential to ensure that everyone understands the process and can complete their tasks accurately and efficiently.
Ensure Medical Billing Accuracy and Stay Consistent
Billing is an essential component of the healthcare industry and correct billing plays a crucial role in reducing claims denials. Claims denials can occur due to a variety of reasons, including incorrect coding, missing information, or policy non-compliance. A thorough billing quality check can help to identify and correct these issues before claims are submitted to insurance companies, reducing the risk of denials.
Billing quality check is the process of reviewing codes, diagnoses, procedures, and patient information to ensure that all necessary information is included and accurate. It also includes checking that all claims meet insurance company policies and guidelines.
By conducting a thorough billing quality check, healthcare providers can reduce the risk of claims denials, minimize errors, and improve the accuracy of their billing information. This helps to ensure that insurance companies receive complete and accurate claims, reducing the need for claims to be resubmitted and reducing the overall time it takes to receive payment.
Billing quality check is a meticulous process and requires attention to detail and a strong understanding of insurance company policies and guidelines. It can be made error-free by ensuring the following:
- Documenting all patient information, diagnoses, procedures, and treatments accurately and in a timely manner.
- Capturing all billing information consistently and clearly defining the criteria used evaluate billing accuracy
- Automating the billing process can help to reduce errors and increase the efficiency of the billing process.
- Training must be imparted regularly to billers to ensure everyone understands the process and can complete their tasks accurately and efficiently.
Follow Payer Guidelines and Stay Updated
Following payer guidelines is crucial in reducing the number of claims denials in the healthcare industry. Payer guidelines are the policies and procedures set forth by insurance companies that dictate what treatments and procedures will be covered under a patient’s insurance plan. By following these guidelines, healthcare providers can ensure that they are billing insurance companies correctly and that their claims are more likely to be approved.
One of the main reasons that claims are denied is because they do not comply with payer guidelines. For example, a claim may be denied because the procedure was not deemed medically necessary or because the patient’s insurance policy does not cover the cost of the treatment. By following payer guidelines, healthcare providers can reduce the risk of claims being denied and minimize the need for appeals and resubmissions.
Following payer guidelines also helps to ensure that healthcare providers receive payment in a timely manner. When claims are denied, it can take time and resources to appeal the decision and resubmit the claim. By following payer guidelines, healthcare providers can reduce the need for appeals and resubmissions, thus improving the effectiveness of denial management services.
Ensuring insurance payer guidelines are followed thoroughly can be ensured in the following ways:
- Regularly reviewing and updating payer guidelines to ensure that they are up-to-date and accurate. This helps to ensure that healthcare providers are following the most recent guidelines and reducing the risk of claims denials.
- Clear communication between healthcare providers and insurance companies is essential to ensure that everyone is on the same page and that all payer guidelines are understood and followed correctly.
Conclusion:
Having full control over denied claims can improve the financial health of your practice by leaps and bounds. It can provide you with the room you need to focus on patient care and grow your business in the right manner. Outsourcing the service to denial management companies can make the process highly efficient.
MedBilling Experts has over two decades of experience assisting hospitals in reducing denials. We have a team at has certified billers and coders to ensure your coding is done with accuracy and complies with all regulations and standards. We follow industry best practices including conducting chart audits, staying up to date with payer guidelines, and meeting all documentation needs to keep denials to bare minimum.
