Adopting Proactive Approach to Reduce Claim Denials

Claim denial occurs when a claim is submitted by the healthcare provider and is not accepted by the payer. Most practices face the challenge of high claim denials. You would be surprised to know that the highest performing medical practices have only a 4 percent denial rate (as per the Medical Group Management Association survey report). In other words, such high-performing practices receive almost 96 percent of insurance reimbursements within the first month of claim submission. These practices adopt a proactive approach to managing claim denials, they take all necessary precautionary actions to avoid claim denial. Adopting a proactive approach can help to reduce claim denials for your practice also. In this article, we shared such revenue cycle operations that can avoid claim denials at the source only. 

Adopting Proactive Approach to Reduce Claim Denials

Collect‌ ‌Accurate‌ ‌Patient‌ ‌Demographics‌ ‌and‌ ‌Insurance‌ ‌Information‌ 

Collecting patient demographics and insurance information is the first and most crucial step of revenue cycle management. Wrong or missing patient and insurance information will lead to claim denial. Just leaving one required field blank on a claim form can trigger a denial. Incomplete information like wrong plan code or no social security number accounts for 61 percent of initial medical billing denials and 42 percent of denial write-offs. You must collect the latest patient and insurance information to be used while submitting claims. Adopt a proactive approach while collecting patient and insurance information, if possible, collect this information 2-3 days prior to patient visit. A couple of days prior to visit, check for benefits and coverage report, login to provider portal and look for updated information.
Verify Insurance Coverage

Almost 24 percent of total claims are denied due to insurance non-coverage. When a patient provides insurance details, that doesn’t mean, all services will be covered under it. Even if a patient has been coming to your practice for years, people change jobs and insurance plans. For each and every patient, perform comprehensive eligibility and verification to find out benefits and coverage of the health plans. Check that the patient’s coverage hasn’t been terminated, their maximum benefit hasn’t been met, and their plan covers the service you’re providing. Ensure that your front desk staff knows the plans you accept, how to interpret policies, and feels comfortable discussing coverage issues with patients. Eligibility and benefits verification will ensure all visited patients have active insurance coverage otherwise you can charge patients for the non-covered portion. 

Check for Medical Necessity and Authorizations

Authorization and pre-certification issues account for 18 percent of total denials. It takes time to learn which services are considered medically necessary, which require prior authorization, and which require referrals. Note that, just obtaining prior authorization doesn’t guarantee payment. The claim also must be supported by medical necessity, filed within the deadline, and filed by the provider noted in the referral or authorization. To stay within the bounds of medical necessity, only perform a procedure if there’s a clear medical reason. Use notes or attach records to support the services provided. The experienced biller can tell you prior authorizations and medical necessity requirements otherwise call the insurance carrier and check if planned services need authorization. Medical necessity and prior authorizations will ensure that your claim will get paid on time.

Ensure Accurate Coding

Whether it’s procedure codes or diagnosis codes, some providers use a specific set of codes in each and every claim. Medical coding is a specialized branch and you need a special set of skills to master this field. Just approximately guessing procedure and diagnosis codes is not going to help you. The best way to reduce denials is by coding to the highest level of specificity. This often means coding up to the fifth digit. If you are using an outdated codebook or your coder or your biller enters the wrong code, your claim could be denied. If your practice depends on a hospital or other facility to provide procedure or diagnosis data, make sure that the chargemaster and diagnosis listing contains the most current version of CPT, HCPCS, and ICD-10 codes. It is a felony to make fraudulent representations to receive payment for healthcare services. This includes upcoding and unbundling. Even ‘honest mistakes’ can put you at risk. Appoint certified medical coders to ensure compliance to payer-wise coding guidelines

Constantly Monitor, Analyze, and Audit

If your practice has a denial rate of 5 percent or less, you’re within an acceptable rate. However, a denial rate over 5 percent requires review. To reduce rejection in medical billing, learn from your mistakes. Identify why denials are happening. Take a close look at mid-cycle tasks, including documentation, chargemaster set-up, charge capture, and claim processing. Conduct staff audits to ensure appropriate documentation and coding. If you uncover weak links, develop processes to strengthen your practices. Prioritize the changes that will most impact the bottom line. Your team should be well qualified to read remittance advice. Every payer will provide a remark code for every denied claim. Your team should be able to understand it and take precautionary actions to avoid such denials in the future.

Tackling the causes of claim denials from the front end can help healthcare organizations reduce denials and increase the success rate of claims appeals.

The above mentioned are major revenue cycle activities to reduce claim denials. But it’s not sufficient, you need to develop a denial prevention culture within your practice to save your time and money. To create such a denial prevention culture within your practice will require expert billers and coders. As per the size of your practice, it may not be economically viable to recruit full-time billers and coders. In such cases, you can think of taking assistance from medical billing companies like MedicalBillersandCoders (MBC). Our expert medical billing services ensure that you will receive more than 85 percent of submitted claim reimbursement within 30 days of claim submission. We also ensure compliance with constantly changing payer policies and reimbursement guidelines. To know more about our medical billing and coding services, contact us at 888-357-3226