Top 7 Insurance Claim Challenges Affecting Your Practice

Significance of Insurance Claim Submission

Running a successful healthcare practice is much more challenging than delivering high-quality patient care services. Whether you are running a solo practice, a laboratory, a hospital, or a dental clinic, there are several things you need to get right, including insurance billing. Receiving accurate insurance reimbursements is considered the backbone of the healthcare revenue cycle. Insurance claim submission is challenging due to the number of factors affecting the process. In this article, we discussed the top 7 insurance claim challenges affecting your practice and also suggested how you can overcome them.

Top 7 Insurance Claim Challenges Affecting Your Practice

1. Missing and Incorrect Patient Information

Missing and incorrect patient information is one of the most common reasons of claim rejection. The front desk team generally doesn’t cross-check patient demographics and insurance information. It could lead to inaccurate data submission leading to claim rejection. Clearinghouse rejects the claim due to inaccurate/ missing data and this claim never reaches the insurance company unless it’s been corrected. You can cross-check patient demographics and insurance information for its accuracy through a patient portal. Your front desk team can immediately inform patients in case of inaccurate information is provided. Accurate patient and insurance information lead to clean claim submission resulting in quicker insurance payments.

2. Improper Coding

Small healthcare practices or solo providers try to manage everything on their own including medical coding. They tend to use three to four procedure codes (CPT) for all their patient visits. Medical coding is a specialized branch and healthcare providers are trained for it. Accurate coding could lead to high denial rates and may compromise patient care. But the more serious consequences of up-coding and acts of medical abuse and fraud could have your practice facing federal penalties and expensive fines. You need an experienced and medical specialty-specific coder. It’s also true that such coders are difficult to find and incur high costs on the payroll.

3. Non-Covered Services

Insurance companies usually cover most medical services provided by physicians, hospitals, prescription drugs, wellness care, and medical devices. Medicare and other commercial insurance companies do not cover certain items and services. Most of the time patients are never aware that the service they need is no longer covered by their insurance until it is time for payment. You can overcome this insurance claim challenge by verifying patients’ coverage at every visit. In the case of non-covered services or inactive insurance coverage, you can check if the patient has additional insurance. If the patient’s insurance is not covering planned services, the provider should notify them that they may be responsible for the payment, i.e., pay out-of-pocket for the service.

4. Missing Referral or Authorisation

In many cases, patients are required to get a referral from their primary care physicians before accessing certain healthcare services. Following the patient’s request, the physician may simply write a script for treatment that references a specific doctor, such as a specialist. However, some insurance companies require referrals to be more formal than a script.  An authorization, also known as pre-approval or pre-certification, is a formal request made to the insurance company before a procedure takes place. Many insurance companies require authorization for certain procedures. The absence of such referral or authorization from patient services can result in claim denial. Provider’s office must understand these requirements and work with patients to get the necessary referral or authorization before submitting claims.

5. Missing Documentation

Every insurance company requires documentation to pay certain claims. The documentation in the medical record needs to be complete and accurate to facilitate an effective continuum of care. Insurance companies want to know if the patient has tried cheaper alternatives before approving surgery. The insurance companies may deny the claim because the documentation is either not a definitive diagnosis or does not support severity. When documentation is accurate and complete, it works wonders at telling a patient’s story and can even improve patient care. Insurance companies will not hesitate to decline any claim that lacks proper documentation. To improve documentation, most experts suggest establishing provider education at the classroom level. Provider needs to document clinical decision-making, rather than just documenting everything.

6. Claim Rejections and Denials

Researchers from California Nurse Association found that 22 percent of the claims submitted were rejected. Denied claim percentage depends upon every practice, it ranges from 10 percent to 60 percent in some cases. The highlighting fact of this survey research is 40 percent of the rejected claim is never resubmitted and 65 percent of denials are never appealed. Receiving accurate insurance reimbursements is essential for the financial sustainability of any practice. Denied and rejected claims can severely damage your practice’s day-to-day activities. To manage this insurance claim challenge, providers need to work with experienced billers and coders to understand denial reasons/patterns, find a resolution, and appeal it in a timely manner.

7. Lack of Patient Education

Patients generally have little knowledge of medical billing. Some may have no idea that the service they are trying to access requires referral or authorization, or that their insurance coverage has changed for some reason. The obvious solution is to educate patients and inform them about financial responsibility. After paying insurance premiums they are hesitant to pay patient portion amounts like co-payments, co-insurance, and unpaid deductibles. With the patient portion increasing exponentially and more and more patients accepting High Deductible Health Plans (HDHP), it’s always advisable to educate patients on treatment plans, their insurance coverage, patient payment portion, and payment options. Educated patients are more likely to complete the treatment and are mentally prepared to make payments at the time of visit only.

Medical Billers and Coders (MBC) is a leading medical billing company providing complete revenue cycle management services. While working with healthcare practices of varied medical specialties we spotted some billing challenges and shared 7 such insurance claim challenges affecting your practice. If you need any assistance in medical billing and coding for your practice, email us at: or call us at: 888-357-3226.