A step towards maximizing your potential profit is to minimize the number of claims being denied and the best way to do that is understand why denials are happening to manage them effectively.
Are you reviewing the number and types of claims being denied in your office? If not, your cash flow could be suffering.
Getting paid the first time you submit a claim has the greatest value and is the ultimate goal. A step towards maximizing your potential profit is to minimize the number of claims being denied. You need to understand why these denials are happening in order to manage them effectively. With enrollment in health insurance exchanges ready to go live on Oct. 1, 2013, the management of denials will likely become an important part of your future cash flow.
Claims are denied for many reasons, but the following can usually be prevented or corrected with attention to detail, review, and a plan of action.
Incorrect patient information
Registration errors do occur. Accuracy in data entry is paramount. Check for items such as:
• Spelling of the patient name
• Correct date of birth
• The proper subscriber health insurance number
• The proper group health insurance number
Verify insurance benefits and eligibility prior to providing the service. Just because the patient presents you with an insurance card doesn’t necessarily mean it’s valid.
If you are not in the provider network, be prepared to appeal the claim and to prove medical necessity. Contact the insurance provider to make sure you are part of the network. Often it is a simple process to become a part of the network and get paid the first time.
Contact the payer to receive an authorization or certification number to be attached to the claim. Keep in mind that payments can be limited or denied if the information submitted with the claim does not match the service approved. Financially, the patient is not liable for the difference if prior authorization/certification is not obtained.
In general, if any patient is not aware that they may be responsible for charges prior to the procedure, your patient satisfaction scores may suffer.
Check the Medicare Coverage Database with CMS for the established local and national coverage determinations. Make sure you obtain from and verbally review with any Medicare patient an Advanced Beneficiary Notice to maximize your return on services that are likely to be non-covered.
Request for medical records support
If medical records are requested, send the records with a copy of the request within the time frame specified. Establish an office process for all record requests and have someone with clinical experience review the record for completeness before submission.
Duplication of claims
Effective July 1, 2013, CMS instituted new claims edits looking for duplication of services without proper modifiers. The use of modifiers is appropriate to indicate multiple procedures performed on the same date of service for the same patient. You will also want to check with the insurance company to see if the service should be “quantity” billed rather than billed as separate line items.
Invalid or missing codes
Make sure that the diagnosis code supports the procedure, and that correct CPT codes, HCPCS codes and modifiers are used. A good coder is an invaluable member of your staff. Keep in mind that proper coding has legal, as well as financial ramifications upon audit.
It is important to know the timely filing requirements for each insurance carrier.
Referral not on file
Confirm referrals from the primary care physician before rendering any services.
Incorrect contractor billed
This most often occurs when a patient has a Medicare Advantage plan. In this case, the contractor is not traditional Medicare. In addition, make sure that you are sending the claim to the proper address for the contractor being billed.
Accident and injury claims
If the claim is the result of an auto- or work-related incident, the patient’s insurer may deny any claims until the settlement of an auto or worker’s compensation claim.
Other benefits available
Make sure you have the right primary insurance listed and verify the information is current.
Just as your staff can make errors in the billing process, the insurer can make errors in the processing of your claim. Use your provider representative at the insurer to help you through the process, if necessary.
The key to getting the claim paid is to act immediately. Evaluate the explanation of benefits for the reason for denial, and promptly take steps to provide further information, correct the error, or appeal the denial.
The foregoing are just a few of the general reasons why denials may be occurring. Having a process in place to track, review, and prevent recurring denials, along with training the staff to be well versed in patient communications, the most current laws and regulations, and appeal processes, will ultimately reduce denials, improve payments, decrease collection costs, maximize profits, and increase patient satisfaction.
It is time to stop the “insanity” of claims denials as defined by Albert Einstein: doing the same thing over and over again and expecting different results.
Beverly A. Miller, CPA, CAPPM is Manager of Physician Services with Hayflich Grigoraci, PLLC in Huntington, WV. She served as President of the National CPA Health Care Advisors Association (HCAA) from 2012-2013.
Hayflich Grigoraci, PLLC is also a proud member of the National CPA Health Care Advisors Association (HCAA). HCAA is a nationwide network of CPA firms devoted to serving the health care industry. Members provide proactive solutions to the accounting needs of physicians and physician groups. For more information contact HCAA at info@HCAA.com.