Claim denials are a headache for most physicians and practice managers. Some practices have experienced 35% or more of claims denied for a multitude of reasons. Not only is this a source of frustration for the physician and their practice managers, but claim denials can also have a significant, negative impact on cash flow and financial performance of the practice.
With the industry change to ICD-10, a multitude of denied charges for coding and billing errors has grown, and the percentage of denied claims on first submission rests around 3.8%. It can be considerably greater if the practice does not have proper training and procedures in place to proactively submit clean claims.
Common Reasons for Claim Denials
If you are finding yourself under constant pressure to get paid for the work you do, and have trouble submitting “clean claims”, start by considering the most common reasons for claim denials.
- Patient ineligibility – The patient does not have the proper health plan coverage because it has ended, and there is no proof of new insurance.
- Errors in patient record – Misinformation collected while obtaining pertinent information from the patient during data entry for the claim is an easy way to get denied.
- Lack of coverage – The patient’s plan does not deem the service to be medically necessary. Many times the diagnosis does not match what was completed by your office causing a denial in claim.
- Deficient claim information – Your claim might be mission prior authorization which the pre-approved service must have in order for reimbursement to occur.
- Code errors – Medical billing can become complicated, and more often than not, the claim form is missing a modifier or modifiers, or the ladder is invalid for the procedure code.
- Dual coverage issues – Often coordination between secondary insurance, or worker’s compensation is not done properly causing claim denial.
- Place of service – It is common to see an inconsistent place of service marked on the claim form such as an inpatient procedure billed in an outpatient setting.
There are many other reasons your practice may have a claim denied, but the above are common across most healthcare practices. Next, you should consider how to proactively avoid these common issues.
Avoiding Claim Denials at Your Practice
To increase the likelihood of problem-free reimbursement, consider the following tips:
Ongoing Staff Training
With industry changes, and new regulations and expectations within medical billing, staff training becomes paramount in the reduction of claim denials for your practice. Staff should be able to submit a clean claim, and understand why claims are denied in the first place.
Have an Effective Appeal for Denied Claims
Claims adjustments with carriers requires specific expertise to respond appropriately. When you have an effective appeal for denied claims in place, you ensure that your claims review process is thorough, and more likely to be adjusted accordingly.
Make Claim Denials a Priority
Often staff members feel overworked so much that they feel as though there isn’t enough time to make claim denials a priority in their already busy day. However, claim denials are extremely costly to a physician and practice. In order to make claim denials a priority, consider outsourcing other job functions to an expert outside of the company. For example, acquiring quality referrals from physicians in your area can be done by a referral specialist whose sole job is networking and maintaining your practice reputation.
If claim denials are a pain point for your practice, you are not alone. Using the tips above while relying on experts outside of the office to help you achieve practice goals will help you train your staff and put more focus on creating clean claims and appealing denied claims. Thus, making your practice more profitable.