Your claim could get denied – either partially or completely.
There are two types of denials: hard and soft.
Hard denials – there’s not much you or your billing team can do about it. You will have to write this off, accept the lost revenue and make sure that you and your medical billing team doesn’t make this mistake again.
Soft denials – on the other hand are considered temporary. Your medical billing or revenue cycle management team has the potential to get this reversed.
Your team should work with you, the provider, to correct the claim.
This might require you to provide additional information / visit note /document to support medical necessity.
Denials will happen – I can guarantee it. It happens to every single provider, practice, health system – no matter how good/bad their medical billing team is.
Some of the reasons for claim denial include (but are not limited to):
Credentialing Issues – The provider is not at par with the payer.. I.e. the credentialing department never got this provider empanelled but submitted the claim with this provider as the rendering provider.
Eligibility issues – The patient is not enrolled in the plan or with the payer in the claim. This can also happen when the patient was out of coverage (either payer or patient might have terminated coverage) on the date of service.
Prior authorization issues – As mentioned above, you performed a procedure and your biller submitted the claim with a specific CPT. However, that specific procedure / CPT is not covered by the plan that the patient is participating in. This means that you were required to get pre-certification / prior authorization for this procedure. However, the prior authorization is not on file. Sometimes it so happens that you did receive the prior authorization but your medical biller forgot to include the authorization number in the submitted claim.
Inadequate documentation. These days payers are asking for more and more documentation (consult notes) for claims submitted. Your claim could get rejected due to the lack of adequate supporting information / documentation. You need to have enough documentation via visit/consult notes to support the reason for performing the medical procedure your claim uses.
Your claim could also be missing a valid referral number. At times (especially with HMOs), you need to have a referral from a primary care before your payer will pay you for the patient visit.
Your billing department entered incorrect demographics information in the claim. The procedure you performed might be age inappropriate according to the demographic information on the claim. Your billing department might have just screwed up and not submitted the correct demographics of the patient.
Under-coding claims. This typically doesn’t always belong in your medical biller’s hands. However, you need to know about these. You might have (intentionally) left out a CPT from the superbill. Sometimes providers do so to avoid audits and you might have done the same as well. You might have coded for a less serious procedure. You could have under-coded for various reasons. However, this is illegal/fraudulent.
Upcoding claims – pretty much the opposite of under-coding. This is where the provider or the practice or the biller adds CPTs in the claim that does not belong there. In other words, the patient was never treated for that procedure. There are several practices (although fraudulent and illegal) that do this – to collect more from the payer.
Clinical documentation issues. Again, this is out of the biller’s hands. You, the provider, are supposed to provide adequate documentation for each patient visit/consult. That not only bolsters your claim submission but is also necessary for appropriate patient care continuity. The sad part is that when your claim gets denied, you are asked for supporting documentation. If your documentation is sloppy, the chances of getting paid are quite slim.
Payer issues. This is also out of your billing department’s hands. Sometimes a claim is denied without enough explanation (codes) in the EOB document.
The more proactive you are in your billing department, the better you will be at reducing claim denials. If you understand the reasons claims are denied (read above), you will be in a better position to reduce those denials.
Continuing education. There are no two ways around this. Codes change and will change (sometimes yearly). New codes are introduced and older codes are phased out. Codes are moving toward more specificity. That means, they are getting more granular. You need to invest in yourself, your career as a medical biller.
Double check you work. I cannot say this enough. Even if this means that you need an extra day to submit claims – do so. We have seen so many simple clerical errors (mostly data entry errors) that derail a claim. Double check your claim before you submit it.
Communicate and collaborate. You are not clinically trained. Revenue cycle management takes a large team with several moving parts and several people involved in the process. Make sure you are talking to others on your team. Questions about the visit notes? Don’t be afraid to ask your providers for further information. Don’t be afraid to kick back a visit note or superbill to the providers either.
Stay in touch with the payer reps. When you submit the claim, it stays in the no-response bucket. Be in touch with the payer reps so you can be aware of errors they have already identified (if any). Start working on those and proactively so that you can re-submit as soon as your claim has been submitted.
One point to note here. If your billing team strongly believes that you should not have been denied a particular claim (or claims), you can always appeal the denial.
Do keep in mind that Medicare/Medicaid are a bit harder and arduous to deal with (they take longer). We find that many practices don’t bother with them. In our opinion, you still should try to appeal the denial. We can show you how to.
If you do not understand the claim denial code in the EOB/ERA, call the insurance company.
When you call your payer line, make sure that you record the date/time of call, the customer service rep you spoke to and the reference number of the conversation (ticket). Put that information on file (usually, we put it as a note on the pt record itself).
You are going to have to call the payer rep again and having the reference number speeds up the process. When you do understand the issue and are re-submitting the claim to get paid, make sure you are also using the reference number there. This allows the claim to be processed as a corrected claim and not as a duplicate claim.
Payer contact list – maintain them!
You always, always need to maintain a list of appropriate contact personnel for EACH payer. Make sure you and your team maintains a list of denials coordinators (not the accounts receivables) at each payer. Establish a relationship with them. Make sure they also understand that you and your practice know what you are doing.
You are not going to have enough time to appeal every denial.
Handling denials is a labor intensive process and labor = costs. Make sure that you prioritize which denials you are going to work on first.
Typically, my advice is to go after the high dollar value denials first. Clear those out, then go to the next bucket of denials.
Understand the denials – very, very well. A few common denial reason codes (that you get in an ERA) are:
– Provider is considered out of network.
– No prior authorization or precertification.
– Incomplete claim information entered.
– Medical necessity – not sufficiently supported documentation provided.
– Lower level CPT was deemed appropriate but your provider did a higher level, more costly service.
– Procedure or CPT is not covered in a patient’s benefits.
– Ineligible patient – i.e. patient no longer covered
– Pre-existing conditions – not covered by the policy.
– CPT and ICD mapping/linking issue.
– Bundled service was unbundled – i.e. you submitted multiple codes for a set that is included in a bundled service
Some of these denials are preventable and some are not preventable. Your practice management system will show you a report on what is preventable and what is not. Note these.
Preventable denials should be brought down to zero. They are simpler to fix and you just needed to be more diligent about your billing process and integrity checking.
Each payer has specific requirements as well. Make sure you are aware of those. Research has shown that it is always more efficient and productive to have individual team members specialize on specific payers. This way, they learn the ins and outs of those payers, thereby reducing the denials.
A generic approach does not work.
Sometimes you really do not have any other way than sending an appeals letter.
Most payers (if not all) have standard appeal letters on their websites. Yes, you might have to hunt them down, but we recommend that you use those denials letters.
When you send the standard appeals letter, make sure that you include ALL the required information (e.g. member name, ID, date of service, claim number etc).
Denials related to medical necessity are a bit tougher to handle. For this, you need to create a customized letter, have the necessary medical documentation attached to the letter as well.
Do not rely on the knowledge of the payer’s claims department.
You obviously have proof or a strong reason to believe why your claim should be paid.
Note down the CPT or CMS or even payer guidelines that you have researched – include those information in your appeals letter.
Include just enough information needed to process your appeal. Never assume that it is better to overwhelm the processor with more information. This will most certainly slow down the appeals process/timeline.
If you are not confident about your ability (or want to save time), just go ahead and recruit a professional reviewer. You can also find (in-house or external) physicians with experience in billing, coding, HIM or utilization review.
Most practices I work with do not have a workflow / process around revenue cycle management.
Here are the steps of appealing claims:
– Call payer to find out more information about the denial
– Request a review of the claim on the phone. If they deny this request, you can call the dept of insurance or the Ombudsman office. If nothing works, consider legal action (and let the coordinator know as well)
– Once you learn more, resubmit the claim. Make sure that you prevent this from being considered a duplicate claim (as mentioned above). You need to file the resubmission with updated clam copy + the original claim copy. You need to submit the remittance advice (RA) and any further documentation your payer rep has asked for. Make sure you mark it as “RESUBMISSION”. This will avoid the claim being rejected as a duplicate claim.
– At the very minimum, use a spreadsheet to manage your denials.
– Track information about each and every appeal – date appeal submitted, payer, filing requirements.
– Set up reminders to follow up – ideally per month. Do not let any appeals fall through the cracks.
Do not make that mistake. If you need to, contact me for a Revenue Cycle Analytics and Revenue Cycle workflow product (it’s free to use).
If you have created a workflow and are using buckets to do root cause analysis of denials, you will also very easily understand how to reduce denials. Here’s more.
Handling denials due to eligibility
Handle denials due to coverage issues
Handling prior authorization related denials
Handling denials due to medical necessity documentation
Handle medical claims denials caused by bundling
Handle medical claims denials due to Incorrect data entry
Medical claims denials due to coordination of benefits
As you can see quite a few of your denials can be traced back to the front end. In other words, if you fix these errors upstream, you reduce the chances of denials. As per a Change Healthcare report, front end revenue cycle teams (registration and eligibility) contribute to 23.9 percent of claim denials.