Increasing Claim Denials
Recently Kaiser Family Foundation published an analysis of claim denials for various marketplace payers for the year 2020. Under the Affordable Care Act, marketplace payers need to report claims denial data and this analysis used the same data to understand claim denial status. The analysis found that, overall, nearly one out of every five claims submitted for in-network services in 2020 was denied by marketplace payers.
However, depending on the payer, average claim denial rates ranged from just 1 percent to 80 percent. Claim denial rates also varied significantly by location, the average claim denial rates were highest in states such as Indiana (29 percent) and Mississippi (29 percent), while rates were just 6 percent in South Dakota and 7 percent in Oregon. This analysis just confirmed ever-increasing claim denials for healthcare providers.
Claim Denial Reason
Payers denied claims for multiple reasons, among denials for in-network services, about 10 percent of denials were for services that lacked prior authorization or referral, 16 percent were for excluded services, and 2 percent were for medical necessity reasons. The majority of claim denials for in-network services 72 percent, were for ‘other’ reasons. While it’s difficult to pinpoint what exactly caused ‘other’ claim denial, these claims might be denied because of administrative or paperwork errors.
This analysis just confirmed ever-increasing claim denials for healthcare providers. This analysis highlighted a whopping 20 percent increase in claim denial rates over the previous five years. The COVID-19 pandemic pushed many hospitals to a ‘denials danger zone’ where denial rates were 10 percent or more of claims.
Kaiser Family Foundation also pointed out that their latest numbers also spell trouble for consumers, of which very few challenge denials even when they received in-network services. Marketplace payers also upheld initial denials in most cases, according to the analysis.
Outsourcing Could be a Solution
As the analysis mentioned, the top reasons for claim denials were lack of prior authorization, excluded services, medical necessity, and administrative or paperwork errors. All these denial reasons could be avoided with assistance from medical billing companies like MedicalBillersandCoders (MBC). Once we receive patient appointment data, we share eligibility and benefits reports for all planned visits.
It helps the practice to understand patient insurance coverage, patient liability, and the need for prior authorizations. Payers keep on modifying the list of services that require prior authorization. As the practice owners are busy in patient care, they may not be able to stay updated on prior authorization requirements.
With the benefits report, you will have the exact amount of patient responsibility which you can share prior to the patient visit. As per the No Surprise Act (NSA), you have to share exact estimates with the patient prior to service delivery. With our services, you will have sufficient time to share estimates and educate patients on insurance coverage and their responsibilities.
It helps in the maximum collection of the patient portion before/ at the patient visit. You can also connect with an insurance rep, to understand the medical necessity and documentation requirements.
MedicalBillersandCoders (MBC) is a leading revenue cycle company providing complete medical billing services. We have been delivering complete revenue cycle management services to healthcare organizations for more than 15 years now. Our expert medical billing and coding team members, ensure that you receive accurate insurance reimbursement for delivered services.
Whether in-network or out-of-network, we provide complete assistance to receive insurance and patient reimbursement. To learn more about our medical specialty-specific billing and coding services, contact us at info@medicalbillersandcoders.com/ 888-357-3226
Reference: Claims Denials and Appeals in ACA Marketplace Plans in 2020
FAQs
1. Why are my claims being denied at such high rates?
Claims are often denied due to lack of prior authorization, medical necessity issues, or administrative errors. The rate of denial also varies by payer, location, and the specific service provided.
2. What are the most common reasons for claim denials?
The most common reasons include missing prior authorizations, excluded services, medical necessity issues, and administrative errors. These can often be avoided with proactive verification and accurate documentation.
3. How can I prevent claim denials related to prior authorizations?
Stay updated on insurance requirements and ensure all necessary authorizations are obtained before services are rendered. Outsourcing to a medical billing service can help manage these requirements and prevent denials.
4. How can medical billing companies help reduce claim denials?
Billing companies like MedicalBillersandCoders can provide eligibility checks, benefit reports, and prior authorization support, reducing errors and helping to collect patient responsibility upfront. This improves the chances of claim approval and minimizes denials.
5. What is the “No Surprise Act” and how does it affect claim denials?
The No Surprise Act requires practices to share accurate cost estimates with patients before services are provided. This helps avoid unexpected charges and improves transparency, reducing the risk of claim denials related to patient responsibility.
