Medical claims denials can cause significant pain to healthcare providers and their practices. A denied claim not only affects cash flow but can also ruin the relationship with a patient. There are several reasons why medical claims get denied, but there are ways to avoid them. In this article, we will discuss five major reasons for denied medical claims and how to prevent them.
1. Misplaced Claims
Lost or expired claims are one of the main reasons for denied medical claims. Claims can get misplaced or lost, so they never get processed for payment. Medical billers should follow up on claims through calls and insurance web portals. The account receivable team should make sure to follow up on submitted claims 15 days after the claim submission.
Medical billers should pay attention to the timely filing limit of each insurance and their dedicated plans. Each insurance company imposes different deadlines for submitting claims. Filing claims to insurance as soon as possible after services have been rendered is generally recommended.
If a claim filing deadline has passed, you can discuss the reason for the late filing with an insurance representative on a phone call. However, most of the time, an appeal with proof of late filing needs to be submitted through the portal, fax, or at the mailing address.
Billing software can provide information about timely filing limits and procedures for submitting claims. Using billing software can help you file claims faster and avoid claim denial due to expired or lost claims.
2. Incorrect Patient Data & Codes: Claim Form Errors
Simple errors like incorrect patient names, characters missing in the insurance member ID number, and incorrect diagnosis or procedure codes can lead to claim rejections. Fixing these errors will reduce the denial ratio and boost the revenue cycle.
In-house medical coders may not be experts in medical coding. Replacing them with expert medical coding service providers can avoid coding-related rejections.
3. Medical Necessity Not Met
Insurance companies do not pay for medically unnecessary treatments. Getting prior authorization can prevent claim denials due to a lack of medical necessity. Effective communication between physicians, medical billing professionals, insurers, and patients can help stay informed about medical decisions whenever the medical criteria are not well defined.
If a claim has been denied because of a lack of medical necessity, the practice can either cover the service expense or try to obtain reimbursement.
4. Use Of Out-of-Network Provider
Patients may change insurance providers or not know the insurance networks. Billing staff should check if your practice is part of the patient’s insurance network and what kind of benefits the patient can expect. Medical billing software can keep you updated about your practice networks.
5. Outsourcing Of Billing Tasks
Medical offices often struggle to keep up with their medical financial needs. Outsourcing medical billing responsibilities to a revenue cycle management (RCM) company that focuses on proper billing and generating revenue is more meaningful revenue. RCM companies are more experienced and effective in optimizing payments and preventing challenges by repeating their amounts.
A company that focuses solely on medical accounting activities means that insurance claims are exceptionally qualified to file and track. They have workers that correspond regularly with many insurance payers. Several billing systems, clearinghouses, and EHRs are well aware of them. Experienced medical billing firms can also monitor and avoid old accounts and identify other revenue loss areas during the medical office’s billing process.
General Methods to Avoiding Claim Denials
Healthcare providers’ billing personnel should track financial statements and check for bottlenecks in the claim submission process. If a claim persists after 30-45 days, the subsequent insurance payer may need to be tracked. Upon confirmation of the claim status, the medical billing staff needs to enter the number of requests and the estimated payment date. Medical professionals should report the payment amount, paid date, and sums charged once the payment has.