Claim denials can be frustrating for any medical practice. They not only lead to high administrative costs but also impact your reputation as a reliable healthcare provider. In addition, appealing denied claims can be a time-consuming process, straining an already overworked administrative team.
We identified the 7 most common reasons for claim denials to help you plug the gaps and manage the process better.
- Incorrect or Missing Patient Information
A simple typo can trigger an immediate denial. An omission or incorrect information entered by a provider or patient (missing payer ID, incorrect plan code, no social security number, name, address, contact information) or even entered by the insurance provider (policy number, address, contact information, etc.) can put you at risk of having a denied claim.
- Duplicate Claims
A claim resubmitted for a single encounter on the same date, by the same provider, for the same patient, and the same service item is known as a duplicate claim. This might happen due to administrative inefficiencies and is often considered one of the biggest reasons for claim denials.
- Non-Covered Charges
If certain medical services or procedures aren’t covered under the patient’s current health insurance benefit plan, or the patient changes the insurance plan and the provider fails to get a pre-authorization for the patient, the claims get rejected.
- Patient Losing Insurance Coverage
In instances where the patient loses the insurance coverage or the patient’s policy lapses and they fail to inform the provider, the claim will be rejected. These are generally easy to avoid if the insurance verification process is initiated right from the start by the provider.
- Prior Authorization
Most insurance companies require prior authorization – a cumbersome process that requires physicians to obtain pre-approval for medical treatments or tests before rendering care to their patients. Many services considered non-emergency or even expensive radiology services like ultrasound, CT, and MRI may require prior authorization since the procedures may be too expensive. In such cases, the claim may be denied because prior authorization was not received from the insurance company.
- Claims Filed Post-Expiration
Insurance companies usually allow a time window of 60 to 90 days from time of service to file a claim. If certain claims are not filed well within the stipulated period or are done so long after the date of service, they may end up getting rejected.
- Improper Coding
The WHO created diagnostic codes (ICD-10) and procedure code (CPT code) to identify services, diagnoses, and medical procedures to make it easier to share and compare patient medical information among various hospitals, regions, and providers. Often, new ICD-10 codes may not be identical to the ones used earlier for common procedures. These are critical and if these are missing, incomplete, invalid, or not related to the medical service provided by the HME/ DME, the claims will most likely be rejected by the insurance company.
Claim denials may seem normal to any healthcare practice, but being complacent about it will no longer be sustainable. Reducing claim denials even by a fraction of a percent can have a substantial impact on your organization’s bottom line. By choosing a medical billing company, you can help simplify your practice and maximize revenue.
Analytix Solutions works with DME and HME practices and businesses to identify and implement medical billing processes. Our customized medical billing solutions improve collections, client service, and claim management. Additionally, we are HIPAA and ISO 27001 compliant and offer flexible engagement models.