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Up to 10% of claims submitted by a typical medical practice are rejected and approximately 90% of denials are preventable. Documentation, coding, and billing are complex processes, and rules can vary depending on the payer, patient, and procedure. Even the most meticulous offices experience claims denials. By knowing the most common denial reasons, you can take steps to avoid and reduce claim denials.
1. Verify insurance and eligibility.
Ineligibility accounts for 24% of all denials. Even if a patient has been coming to your practice for years, people change jobs—and plans. Check that the patient’s coverage hasn’t been terminated, their maximum benefit hasn’t been met, and their plan covers the service you’re providing. Ensure that your staff knows the plans you accept, how to interpret policies, and feels comfortable discussing coverage issues with patients.
TOOLS: PrognoCIS includes a batch eligibility feature. This provides a report of all patients on schedule and if they are active or inactive.
2. Collect accurate and complete patient information.
Just leaving one required field blank on a claim form can trigger a denial. Incomplete information like wrong plan code or no Social Security number accounts for 61% of initial medical billing denials and 42% of denial write-offs.
The most commonly missed data points are the date of the accident, the date of a medical emergency, and the date of onset. It’s also essential that the information provided is accurate, so double-check:
- Patient name
- Date of birth
- Insurance payer
- Policy number
- Group number (if required)
- Patient’s relationship to the insured
- Primary insurance (in the case of multiple insurances)
To help inspire staff to improve data accuracy, consider issuing “report cards” to provide feedback. The good news is that if a minor error or omission occurs, you shouldn’t need to request an appeal or redetermination.
TOOLS: With PrognoCIS, you can make certain fields mandatory on the patient registration screen.
3. Verify referrals, authorizations, and medical necessity determinations.
Authorization and pre-certification issues account for 18% percent of denials. It takes time to learn which services are considered medically necessary, which require prior authorization, and which require referrals. And, obtaining prior authorization doesn’t guarantee payment. The claim also must be supported by medical necessity, filed within the deadline, and filed by the provider noted in the referral or authorization. To stay within the bounds of medical necessity, only perform a procedure if there’s a clear medical reason. Use notes or attach records to support the services provided.
TOOLS: Use PrognoCIS’s eligibility feature to determine if a patient needs a referral. The system will provide each patients’ benefit details, including if they are a member of an HMO. We also offer prior authorization services. Regarding medical necessity determinations, PrognoCIS can easily transmit medical documentation with the original claim directly through a clearinghouse.
4. Ensure accurate coding.
The best way to reduce denials is by coding to the highest level of specificity. This often means coding up to the fifth digit. If you are using an outdated codebook or your coder or your biller enters the wrong code, your claim could be denied. If your practice depends on a hospital or other facility to provide procedure or diagnosis data, make sure that the chargemaster and diagnosis listing contains the most current version of CPT, HCPCS, and ICD-10 codes.
It is a felony to make fraudulent representations to receive payment for healthcare services. This includes upcoding and unbundling. Even “honest mistakes” can put you at risk. Develop staff protocols to reduce your risk and liability.
TOOLS: Our third-party vendor SNOMED ensures updated CPT/diagnosis codes are loaded into the database.
5. Get up-to-date pandemic-related billing changes.
According to MGMA, changes in reimbursable services during the COVID-19 pandemic have been problematic for many providers, particularly regarding telehealth and telephone visits. Additionally, CPT code 99072, which went into effect in September 2020, was created to cover added costs for pandemic safety measures, including PPE. However, not all commercial payers have implemented this code. MGMA recommends putting rejected claims related to this code on hold, sending them in intervals to determine when payers are ready to receive them.
The association also recommends that practices review the guidelines and code descriptor changes enacted on Jan. 1 for office and other outpatient E/M services (Codes 99202-99215).
6. Know your payers—and their rules.
Most providers accept 15 to 20 insurance plans.1 Understanding payer requirements will expedite payment—and reduce denials. Rejections for procedures not covered can be avoided by checking details in the insurance eligibility response or calling the insurer before providing care. Monitor payers’ websites and correspondence and establish relationships with your primary payers to get answers and resolve issues faster.
TOOLS: Our Prior Authorization Tool can determine if authorization is required for a patient. It will also provide plan benefit information on the particular procedure.
7. Submit the claim on time.
Each payer has requirements for when claims must be filed. Commercial payers and Medicare have different guidelines. Editing claims can cause delays, pushing submissions past the deadline. If you miss a deadline, the claim will usually be denied.
Create processes and cheat sheets to ensure payers’ deadlines are met. Include a workflow to alert staff when a claim is approaching the deadline. To reduce claim denials, hold a competition to see who can submit the most accurate—and timely—claims each week, month, quarter, and year.
TOOLS: The Open Chart reporting feature in PrognoCIS includes timely filing dates—an important metric used to manage the revenue cycle.
8. Use technology to help ensure clean claims.
While these tips may seem cumbersome to implement, you can automate many of them. Your practice management system or Electronic Health Record Software may have built-in alerts to ensure necessary data is collected at every encounter. Many systems will review claims before they are submitted and flag (“scrub”) those that are missing information or are inconsistent with set standards. Some tech tools help ensure proper documentation and can simplify the submission of appeal letters.
TOOLS: EMR and Billing scrubber checks are available. We fully scrub claims to ensure a 100% clean claim submission.
9. Monitor, analyze, and audit.
If your practice has a denial rate of 5% or less, you’re within an acceptable rate. However, a denial rate over 5% requires review.1 To reduce rejection in medical billing, learn from your mistakes. Identify why denials are happening. Take a close look at mid-cycle tasks, including documentation, chargemaster set-up, charge capture, and claim processing. Conduct staff audits to ensure appropriate documentation and coding. If you uncover weak links, develop processes to strengthen your practices. Prioritize the changes that will most impact the bottom line.
TOOLS: Denial analysis reports, denial monitoring, and appeal services are available through PrognoCIS.
10. Ensure accurate and complete documentation.
Miscommunications happen. What the biller codes may be different from what the doctor meant in the documentation or transcription. Unfortunately, this discrepancy can have a severe financial impact. If a service is not documented, you will not get paid. Clear documentation helps ensure proper coding the first time.
Documentation should include the specific diagnosis, details related to the procedure or service, and patient history. Documentation is deemed insufficient if it doesn’t adequately support payment for the services billed or if a required document is missing. If your practice is receiving denials related to documentation, work with your providers to find ways to improve the process.
Don’t forget to provide documentation feedback to your physicians. Hold in-services to educate them about payer changes and new documentation requirements. Also, inform front-end staff about mistakes and retrain if needed.
TOOLS: To make documentation easier, PrognoCIS integrates with Dragon Naturally Speaking transcription software.
Developing a denial prevention culture throughout the revenue cycle will save your practice time and money. PrognoCIS by Bizmatics can help. Request a demo today.