How to Handle a Claims Denial

by | April 17, 2020 | 10:09 am
How to Handle a Claims Denial

Denial of a claim refers to refuting payment for a medical bill in the medical billing business. As a result, knowing how to manage and reverse a denied claim is vital for successful medical billing management. According to a Becker’s report, the standard denial rate benchmark is less than 5%, though a rate of 1% is achievable.

The reality is, that every percentage denied is payment not received. For a startup or a small business, any denied payment can hurt the bottom line.

Claims denial in medical billing may include several prospects: 

  • Possessing knowledge and the experience on how to handle it, 
  • Completing necessary and relevant paperwork, and
  • Pursuing the people needed to complete paperwork. 

So, how does one tackle a claims denial?

Step 1: Identifying the Denied Claims

Even if it sounds simplistic or easy, one of the most important aspects of working on claims denial is to identify the claim that is being denied. The healthcare landscape can be surprisingly crowded with documents and paperwork. Identifying the denied claim, or claims, is the first step in evaluating the reasons for the denial in the first place. 

Step 2: Identifying What Caused the Denial

Medical billing begins with the first step: registration of the patient or recording the details of the patient. These details include patient information, medical history, including diagnoses and prescriptions, insurance details, validation of procedures and diagnostic codes. Any inaccuracy or incomplete information found in any of these aspects can lead to a claims denial. At times, critical data such as physician’s or caregiver’s signatures on a particular prescription may be missing, leading to a denial of the claim.

Tracking of the application is vital for identifying the reasons for denial. There can be several, for example:

  • A prescription not containing the treating doctor or nurse’s signatures or approval.
  • Insurance documents not reflecting relevant details.
  • Mandatory documents, such as medical history records, missing or not reflecting details as required for insurance purposes (such as permissions by the authorized signatory, etc.).

Step 3: Pursuing the Solutions

One of the primary reasons why medical billing data should be handled by professionals is the streamlining at source. This helps in tracking a particular claim through the documentation and paperwork, ensuring that the risk of denial is mitigated to some extent. Watertight record-keeping is essential to medical billing claims applications. Professional services possess the experience and expertise to provide reliability.

Helping Reduce Claims Denials

Issues such as duplicate information on a patient’s history, critical points or aspects in the medical history that are hidden, not addressed, or bundled with other information, contribute to claims denials. 

There are other, avoidable reasons, including the failure to meet timelines of filing the claim or failing to meet the credentialing requirements. 
An effective way to handle a claims denial is by approaching a professional agency that has the expertise and infrastructure to deal with the required documentation for medical billing. At Analytix, we offer HIPAA-compliant medical billing solutions that also include help with denied claims. Email us at [email protected] or call 781.503.9002 to find out how we can help you and your business.