Medical billing is a complex process that requires accuracy and attention to detail. Claim denials are becoming an increasing source of worry for health systems, hospitals, and medical practices. Despite their best efforts, the rate of claim denials continues to rise.
Denials are an inevitable part of the revenue cycle for any healthcare provider, but understanding the root causes and taking steps to improve your revenue cycle can reduce the number of denials and lost revenue.
Reasons for medical billing denials:
Medical billing denial can be extremely frustrating and costly for any medical practice. Submitting claims can be complex and time-consuming, and denial can mean that a practice must resubmit the claim or appeal the decision.
1. Coding Error: Coding errors are among the most common reasons for medical billing denials. This occurs when the wrong codes are used to submit a claim or don’t accurately reflect the services provided. It’s significant to ensure that your coding staff is up to date on the latest codes and that they understand the nuances of coding for each service. This could include regular audits of coding staff and claims and providing additional education and training to ensure coders are aware of the latest coding guidelines.
2. Documentation Error: Another common reason for denials is documentation errors. This occurs when the medical record needs more detail for the insurance company to process the claim. It’s crucial to ensure that all the necessary documentation is present for each claim, including patient demographic information, diagnosis codes, and treatment codes.
Claims are more likely to be refused without thorough and accurate paperwork. Electronic health records (EHRs) and other tools can expedite document collection and guarantee that all relevant information is included.
3. Eligibility Issues: For treatments that require authorization, it’s crucial to ensure that authorization is obtained prior to treatment. This can be accomplished by reviewing patients’ eligibility before they arrive for their visit and confirming with insurance companies that the patient does not require further authorization for the services being provided.
Another frequent reason for denials is eligibility problems. This can happen if the patient’s insurance coverage has run out or if the patient is ineligible for the treatments provided. A claim should always be submitted after confirming the patient’s eligibility.
4. Timely Filing: When medical claims are not submitted within the time range stipulated by the insurance carrier, they are considered late. This is a common basis for denials because insurance companies have firm deadlines for submitting claims. It is critical that you submit claims as soon as possible to avoid these denials. This ensures that they reach the insurance company before the deadline.
It is critical to understand the time frames established by the insurance company, as they may differ based on the provider and the type of treatment being performed. Failure to submit claims within the time range specified can result in a denial.
5. Preauthorization: When it comes to medical billing and payments, preauthorization is an essential step that often plays a role in whether or not a claim is ultimately paid. It is a critical process as it helps ensure that the procedure or service is medically necessary and that the insurance company will cover the cost of the service.
Preauthorization can also be a major cause of denials. Without reauthorization, the insurance company may deny a claim, even if medically necessary, because it was not preauthorized. The insurance company may also accept the claim if the preauthorization request is complete or correct.
6. Incorrect billing: Finally, incorrect billing is a primary cause of denials. Incorrect billing can lead to costly denials from insurance companies, resulting in lost revenue for healthcare providers. This could include incorrect diagnosis codes, incorrect CPT codes, incorrect procedure codes, incorrect modifiers, or even incorrect patient information.
- United States