Claim denials are one of the most troubling issues for providers. Overall, the American Medical Association (AMA) reports a 47% decrease in claim denials in 2013. For commercial health insurers, the denial rate decreased from 3.48% to 1.82% between 2012 and 2013. However, CMS estimates that as ICD-10 is implemented, claim denial rates could increase by 100%-200% while providers adjust to the new codes. AMA president Ardis Dee Hoven agrees that, despite the progress, there’s still a long road ahead for the health insurance industry.
A Medical Economics article list 15 reasons that claims are most commonly denied:
- A duplicate claim was submitted when a practice hasn’t received reimbursement.
- The patient’s health coverage has ended and they haven’t shown proof of new insurance.
- The patient doesn’t meet the deductible for the year.
- Services are bundled and so providers are receiving only one payment.
- The patient has exceeded the benefits covered by their plan.
- Modifiers are missing from the claim or, if present, they’re invalid.
- Place of service listed on the form isn’t consistent with the actual location.
- A health plan doesn’t cover a certain service or a service isn’t medically necessary.
- Important information is missing from the claim.
- In the case that a physician isn’t an in-network provider, an insurer might pay less for a patient with out-of-network benefits.
- There’s an error in the codes or data.
- If there’s dual coverage, the benefits covered by each need to be coordinated.
- The deadline to file the claim has already passed.
- There are typos or errors in the claim or in patient data.
- CPT and diagnosis codes are outdated or invalid.
The Medical Group Management Association (MGMA) expects that the number of claim denials will continue to rise. Before the situation escalates, providers should emphasize training among their staff in order to avoid these mistakes. Meanwhile, the AMA is encouraging a standardized system across the industry for processing claims, which will regulate administrative burdens and improve healthcare spending.
Author: Apoorva Anupindi