Author: Gina Wysor
Medical Billing claim errors can be a real pain to deal with because of the time it takes to determine what went wrong, correct it, and resubmit a claim. Many providers have a significant amount of money stranded in unpaid or rejected claims that never get addressed because no one in the office has the time or desire to work on it.
I’ve seen estimates that as many as 10% of claims are initially denied or rejected. Of these only about half are typically resolved in favor or the provider. From my own experience I’ve received calls from physicians that are seeing much higher rejections than this because their billing practices are such a mess. Or they have someone trying to do the billing who has never done it before.
Once the doctor has provided their services, the claim is then coded, entered, and submitted. The next step is getting paid. But then you receive the EOB (Explanation of Benefits) that the claim has been denied – or rejected – sometimes with a bunch of cryptic denial codes.
These denials can be prevented or minimized by using good billing practices and addressing problems promptly. The longer an unpaid claim sits around, the less likely it is to be corrected and resubmitted – which becomes lost revenue for the provider. I’ve found it takes a lot more time and effort to find out why a claim was denied or rejected, than it would have taken to catch it when the claim and patient info was being entered and submitted. In some cases there’s not much you can do because the insurance payer questions whether a procedure is necessary. In those cases an appeal letter has to be submitted for reconsideration.
Most Common Reasons for Rejected Claims
Some of the most common causes of claim rejections are:
● Errors to patient demographics such as age, address, date of birth, sex, etc.
● Errors in provider information.
● Incorrect patient insurance ID number.
● Patient is no longer covered by policy or insurance info is not up to date.
● Incorrect, omitted, or invalid ICD or CPT codes.
● Treatment code is not consistent with diagnosis code or visa-versa.
● Incorrect modifiers.
● No pre-authorization (More common with certain specialties).
● Place of service code incorrect.
● Medical necessity questioned.
● No referring provider ID or NPI number.
● Upcoding or Unbundling codes.
Fortunately these are some of the easiest issues to fix and resubmit the claim assuming the patient notes are readily available. This is where having a good EMR (Electronic Medical Records) system is helpful to the billing specialist.
Denied Claim Verses Rejected Claim
A denied claim is not the same as a rejected claim, however both terms are many times used interchangeably. A rejected claim has not been processed due to problems detected before the claim is processed. Claims are typically rejected for an incorrect patient name, date of birth, insurance ID, address, etc. Since rejected claims have not been processed yet, there is no appeal – the claim just has to be corrected and resubmitted in order to be paid.
A denied claim is one that has been through claim processing and is determined by the insurance payer that it cannot be paid. These claims usually require an appeal by submitting the required information or correcting and resubmitting the claim.
Common Causes of Billing Errors
A frequent cause of rejected claims is incorrect or out-of-date patient info. When the patient checks in, that’s the time to ask if there are any insurance changes, address changes, etc. The front desk employees play an important role in the reimbursement process and making sure to ask if a patient’s info is still up to date. People move, change jobs, and change insurance all the time.
As mentioned above, peoples insurance changes all the time. That’s why it’s important for a provider to verify insurance before treatment. We frequently see claims rejected because the date of service is after the patient’s insurance coverage ends. There are also situations where the service or procedure is not covered by their plan. This is especially important for certain specialty practices such as mental health.
Another common cause is superbills that are difficult or impossible for the biller/coder to read which can lead to errors when the information is entered. We all know that sometimes a physician’s handwriting can be difficult to read or interpret. When a claim is rejected or denied, it can be very time consuming for both the biller and the provider to pull the patients record and figure out what the problem is – especially if it’s a coding issue.
Employee Training or Experience
Untrained or inexperienced employees can contribute to billing errors. We all have to learn somewhere. Many providers don’t see the need to pay well for the billing and coding functions. This can lead to hiring untrained and inexperienced employees who are not knowledgeable of the claim process or proficient using practice management software. Hiring experienced staff or investing in their training may cost a little more, but believe me it’s money well spent.
Charges Not Posted
Many providers don’t realize the importance of posting insurance and patient payments for successful claim processing. If insurance payments do not get posted, the patient can’t be billed for the remaining eligible charges, copays, or coinsurance. Secondary claims also require primary insurance processing before they can be submitted. This can add up to significant revenue for a practice.
It’s also important to promptly post payments so the practice can understand how it is performing financially. Without posted charges, those managing the practice don’t have the reporting info that shows accounts receivable, unpaid claims, payments by insurance carrier, payments by procedure, patient payments, etc.
Good Billing Practices to Prevent Errors
1 Submit a clean claim the first time without any errors. When information is difficult to read or doesn’t look right, go back to the original documents such as the superbill or patient insurance card when they are readily available. It’s much easier to do this up front than when the claim is denied or rejected.
2 Ask each patient when signing in if there are any changes to their insurance or patient info. Trying to get this info after the claim has been rejected is a lot more time consuming and difficult.
3 Double check claims when they are being entered. Many clearinghouses or claim software can catch obvious errors such as missing or invalid information but don’t have the ability to catch coding errors.
4 Understand the EOB’s. This takes experience. Many billers and coders may not know what the cryptic codes and messages mean that the insurance company lists on the EOB for denied or unpaid claims.
5 Use the reporting features of your practice management software. Most all practice management software has reporting features that allow you to analyze your accounts receivables. Look for trends in claims that are being denied. What are the most common reasons are for denial? What insurance companies are denying the most? A lot of $ can be saved by looking at the data and asking some simple questions.
6 Follow up promptly. The sooner you follow up on an unpaid or rejected claim, the more likely it is to be paid. In claim processing, time is the biggest enemy for resolution. Also most insurance payers have timely filing requirements.
Some denied claims will require an appeal letter to be submitted. The letter should clearly communicate to the insurance payer why the denied charges should be reconsidered. It should include all the specific claim data and documentation. The more relevant info the more likely it will be favorably considered. This could include any supporting notes, lab results, etc. Also try calling the insurance company first. Many insurance payers have a representative that can be very helpful for resolving these types of claims. Our local Blue Cross/Blue Shield has a provider contact that’s really helpful in identifying what’s wrong with the claim and what we need to do to resolve.
Before filing an appeal with the insurance carrier, check out the contract your provider has with them to have a good understanding of their appeals process. Many insurance payers have specific criteria and time periods for appealing claims. If you need to submit a corrected claim, make a note on the claim that it is a corrected claim when sending via paper, or attach a letter stating what corrections were made to the claim.
Errors by Insurance Carriers
Believe it or not it’s not always the providers or the medical billing specialist’s fault.
Even when “clean” claim makes it to the insurance payer, that doesn’t always guarantee they are going to get paid. The American Medical Association has estimated that an insurer’s electronic claim processing accuracy ranges from 88% to 73% depending on the payer. This is most likely due to a lack of claim processing standard requirements – they vary with each insuror. Some practices and cumbersome appeals processes the insurance payers use also contribute to reduced provider payments. The AMA also estimates that a physician can spend up to 14% of their income dealing with the insurer’s requirements. Unfortunately there’s not much the billing specialist can do about these issues other than to challenge the insurance company when claims are denied.
In summary medical billing and claim processing errors are a part of process due to the complexity of the claim process and all the players involved. Adhering to good billing practices and dealing with issues promptly can lead to a much more efficient billing process and save the provider stranded or lost revenue.
For more information on medical billing topics visit http://www.all-things-medical-billing.com/