To ensure a smooth sailing journey towards the clearinghouse water and getting paid fast, every medical practice should make sure that their insurance claims are right the first time. You of all people should know that a rejected claim with errors slows down the payment process which can have a great impact on your practice’s cash flow.
The two biggest obstacle that can affect the revenue of your practice is insurance claim denials and insurance claim rejections. Often times, the terms “claim denials” and “claim rejections” are often used interchangeably which is a mistake. It is very important to fully understand the differences between claim denials and claim rejections because this can cause a negative impact on your medical practice’s medical revenue cycle.
Here’s a better understanding of what claim rejections and claim denials are, their differences, why they occur, and some helpful tips in order to improve your practice’s claim rejection and denial rates.
What are Claim Rejections?
When a claim does not meet the correct format and data requirements, they will not be processed by submitted payers. This is called a claim rejection. Because they are not considered to be received by the prayer, these claims will not be processed. To put it simply, once these claims have been corrected from errors, they can be resubmitted. Examples of claims rejections are only due to very simple errors such as a missing or transposed digit in the patient’s insurance identification number, or a misspelling in a name. In most cases, errors like these can be easily corrected and quickly which means you can submit your claims right away as well.
What are Claim Denials?
Unlike claim rejections, claim denials have actually been received and then processed by the payer. But, claim denials cannot be resubmitted. By now, you should have already researched why claims are being denied so that you can write a reconsideration request or an appeal. It is a must that you should submit a reconsideration request or an appeal request alongside the claim that you are submitting. Failure to do so would result in your claims being denied as a duplicate claim. This will cost you more money and time as the claim will be sitting on a desk unpaid.
Common Reasons for Claim Denials:
- Duplicate Claims for a Service – This occurs when claims are submitted multiple times for the same service, provider, date, encounter, and beneficiary.
- Missing Information – Sometimes a denial occurs because of missing information. A field may have been left blank, the social security number could be missing or incorrect, or it could be missing modifiers.
- Uncovered Services – Certain services are not covered by payers. Claims submitted for uncovered services end up being denied.
Other possible reasons for claims to be denied includes:
- Coverage termination
- Required precertification or authorization
- Coordination of benefits
- Bill liability carrier
- No referral on file
Common Reasons for Claim Rejections:
- Incorrect Patient Information - This can include using a nickname instead of the name on file with an insurance company, an incorrect birth date, the wrong insurance ID, missing information, or submitting to the wrong insurance.
- Incorrect Coding – Using the wrong CPT code, an ICD-10 code that does not match the CPT code, or the wrong modifier are all cause for rejection.
- Incorrect Place of Service – Was the service performed in the office, at the hospital, inpatient or outpatient, emergency room or nursing home? Each place has a different two-digit code that must match the CPT code.
- Out of Date Information – Using patient information that is out of date or an old CPT or diagnosis code.
- Duplicate Claim – Submitting the same claim again whether by accident or on purpose.
- Eligibility - Patient is not eligible or has no insurance coverage.
Helpful tips to Improve Claim Rejections and Denial Rates:
Educate your staff to improve patient data quality
It’s pretty obvious that one of the most common reasons for claims to be rejected or denied is because of inaccurate date or incomplete data. Make sure your staff is educated and keen enough. Train your staff and implement practices that require your staff to always check registration data for accuracy, completeness, and consistency.
Work with your Payers
Be more engaging to your payers by working and talking about eliminating, and/or discussing contact requirements that could result in denials that are regularly overturned.
Track and analyze trends
Track, measure, and report trends by procedure, payer, department, and doctor. By doing this, this allows your practice to categorize your rejections and denials so you learn where your problems lie.
Have a denials and rejection prevention mindset
Always make sure that every part of your practice has a denials patient accounting, medical records, providers, and compliance. As long as everyone will work together to prevent denials, and practice great work ethic, you can see your rejection and denial rates go down.
Work with medical billing and coding experts
One of the best ways to optimize claims management for your practice is to begin working with medical billing and coding experts. Outsourcing your billing and coding can help you quickly resolve problems with rejections and denials, lowering rejection and denial rates and helping you boost your practice’s revenue.
Triple check your work
When you type fast, it is so easy to make typos. By simply forgetting a digit in an insurance ID number or simply transposing a number will cause your claim to be rejected. Always be diligent about triple checking your work and it will automatically reduce the risk of denial.
Make sure to verify your coverage
Make sure you have the correct insurance information to bill the claim by verifying eligibility of coverage at each visit. The billing software you have chosen should be able to do this for you.
You should always monitor your claim denials on a regular basis. Multiple claim rejections can happen simply because your biller did not know the new insurance company requirement.
File claims within 24 hours
You may have to put a claim on hold to obtain correct billing information or ask the doctor about a code, but don’t forget about it. It’s also important that you work the claim rejections right away, as time is of the essence in both cases.
Medical claim rejection and denials can be the most significant challenge for a physician’s practice. They certainly have a negative impact on revenue and the billing department’s efficiency. By properly interpreting claims data, taking a proactive stance and paying attention to the details, a medical practice can prevent rejections and denials before claims are submitted and if claims are returned, make corrections in a timely fashion. DrCatalyst can help you avoid this burden of claim rejection and denials. To know more about our medical billing services, feel free to contact us.