Cutting Down on Claim Denials for your Healthcare Organization
Medical claim denials are a frustrating part of any medical practice. Resolution is time consuming and a serious drain on facility resources. But providers and practices can mitigate the effects of claim denials with systems and procedures designed to prevent most denials before the claim is even filed.
The problem
According to a 2017 report by Medliminal Healthcare Solutions, 4 out of 5 U.S. medical bills contain mistakes, and those mistakes cost $68 billion annually in unnecessary healthcare spending by doctors and patients. Many of those mistakes result in a claim denial. It’s estimated that each denial costs approximately $118 in recovery expenses.
Although most denials are simply matters of human error, some are caused by deliberate attempts to defraud the system. Upcoding — charging payers for a more expensive service than the one delivered — is a common example. Unbundling fraud is another. This is billing with several different codes when there is a single, less expensive code for combined services. Cost shifting is the fraudulent practice of charging insured patients more to balance to cover costs for uninsured patients who can’t afford to pay for the services they receive.
Reasons for claim denials
Commercial insurance companies and Medicare/Medicaid plans have a variety of reasons for denying medical claims. The most common include:
The patient doesn’t have coverage for a particular procedure.
The provider does not get prior authorization from the payer.
The claim is incomplete or contains inaccurate patient information.
The patient uses an out-of-network provider.
The claim was not filed within the correct timeframe.
The patient hasn’t met their deductible.
The patient has exceeded their maximum benefits for the year.
The claim contains coding errors.
Reducing claim denials
Claim denials are frustrating, but if providers and healthcare facilities are diligent and proactive, most denials can be prevented. Consider these steps to reduce the chances of claim denial:
Verify patient insurance coverage, eligibility for a particular procedure, and receipt of prior authorization and medical necessity assessments before providing treatment.
Train staff to input data correctly, and offer incentives for accuracy. Use automation and medical billing software programs to reduce manual data entry errors.
Check the patient’s insurance information to ensure the patient will not have unexpected medical bills they cannot pay, and verify timeframes to ensure claims are filed before deadlines.
Medical billing codes change frequently, so it’s imperative for coders to stay up to date with codes and regulations. Coders should undergo periodic training for continuing education. Consider hiring a professional medical coding company to perform your billing services.
Claim denials are a frustrating hassle for medical practices and providers. They disrupt the revenue cycle and hinder a provider’s cash flow. But the patient often pays the highest price. Denials can lead to disruption of their healthcare services and negative health outcomes. With due diligence, providers and coders can reduce denials and improve the medical billing process for all involved.
