For medical offices and hospitals, generating enough income to pay overhead costs and deliver high-quality care is a significant challenge. Medical billing denials and solutions, together with other falling reimbursements, governmental rules, and third-party specifications, are the key issue for maintaining a successful medical firm. Ineffective billing and coding lead to rejections from payers as well as delayed or inaccurate reimbursements. Getting expert assistance is a workable solution. Denials come in many forms, and working with an expert physician billing company can help you avoid them.
Healthcare Must Change: Most Medical Billing Rejections Can Be Prevented
Approximately 85% of rejections, according to the Change Healthcare 2020 Revenue Cycle Denials Index, are avoidable, yet only about a quarter (24%) of them can be reverse. The study uncovered alarming data:
- Since 2016, the average percentage of denials has increased by 23%, and 11.1% of claims will be rejected outright through the third quarter of 2020.
- Nationwide, denials have increased 11% since the start of COVID-19.
- In areas where COVID-19 infections have been most prevalent in the first wave, denial rates are higher.
- Front-end revenue cycle problems (Registration/Eligibility, Authorization, Service Not Covered) account for fifty percent of denials.
- Since 2016, Registration/Eligibility has accounted for about 27% of denials, remaining the leading reason for denials.
Typical Reasons for Medical Billing Rejections
There are two types of claim denials: hard and mild. When the insurance company rejects a claim because a service is not covere, this known as a hard denial. Even appeals often fall short of overturning or amending a harsh decision, resulting in lost money. When an insurance company examines a claim and declines payment due to a problem like missing information or inadequate documentation. This known as a soft denial. Soft denials are momentary and may be overturn if the provider updates the claim with the proper information or makes the necessary adjustments. The causes of claim denials are widely known to physician billing businesses, which also assist practices in putting preventative measures in place.
Hard and soft medical billing software denials
Knowing where the highest margin of mistake is will help you prevent invoice rejections. Denials come in two flavors: hard and soft. Hard denials are irrevocable, as their name suggests, and can lead to lost or written-off revenue. Soft denials, on the other hand, are momentary and may be overturned if the provider amends the claim or gives further details.
Information about missing or incorrect claims
The submission of an incomplete claim form may result in a denial. Social security numbers, plan codes, modifiers, addresses, and other demographic and technological issues could all be examples of missing or incorrect data on a claim. According to the Change Healthcare 2020 report, 26.6% of medical billing denials are attributable to patient registration/eligibility problems, while 17.2% are attributable to missing or incorrect claim data. In order to avoid eligibility denials while charging for medical services, insurance verification is crucial.
Mistakes in medical coding
A payment refusal is the result of coding errors in the bill. Errors can be under- or over-coded, which happens when the claim includes higher-level CPT or HCPCS codes than what is justified by medical necessity, medical facts, or the provider’s documentation. Other errors can be missing codes, incorrect codes, using the incorrect coding system for the insurer, the standard of care does not align with the included diagnosis codes, and so on.
Duplicate service or claim
This kind of denial happens when the same healthcare practitioner submits claims for the same beneficiary for the same service on different dates for the same interaction. Up to 32% of Medicare Part B claim denials are due to duplicates.
Patient benefits are not coordinate enough
There may be several payers for some patients. The primary insurance must receive all claims before the patient’s secondary and tertiary insurances, depending on the severity of the situation. The following are some causes of coordination of benefit denial.
Service not covered
This kind of refusal happens because insurance coverage was not check to see if the patient’s current benefit plan covered the treatments and services being offer. According to the Change Healthcare 2020 Revenue Cycle Denials Index, Service Not Covered is the reason for 57.7% of denied claims.
Service has already been decided
When a service is already a part of another claim or payment that has already resolved, a denial of this kind occurs.
Authorization/Pre-Certification
When a payor’s specified prior authorization requirements are not meet, a claim is reject. Additionally, because of how frequently and abruptly these rules change. Practices would need to file refused claim forms again in compliance with the payer’s new requirements.
Procedures won’t be approved if the patient’s current benefit plan doesn’t cover them. These are typically simple to avoid because they may be avoided by reviewing a patient’s plan or contacting their insurance before submitting a claim.
The submission deadline has passed
Insurance companies have stringent deadlines for filing claims. As well as one for filing revised claims and reviews to verify codes and coverage. 81% of complicated claim denials in the fourth quarter of 2015 were due to inpatient medical coding errors, and fixing them might result in delays exceeding.
Methods to Avoid Claim Denials
Despite the fact that the majority of medical billing disputes are avoidable, the issue persists. According to a research cited by Medical Economics, the reasons for the increase in claim denials include “staff attrition and training, a growing backlog of denials, antiquated technology, and a shortage of denials resources, such as expertise to assist appeals and data for root cause investigation.”
