How to Reduce Claim Denials

Consistent cash flow is essential to the health of any business. This holds true for medical practices, as well. Maintaining an adequate level of revenue while minimizing the number of claim denials can be a struggle. Unfortunately, claim disputes have a number of associated costs beyond the denied payment. Estimates show that the average medical practice could loose between $30,000 and $80,000 yearly in denied claims and the staffing expense associated with resolving them.

Appealing denied claims can be a huge time drain on your staff. In some cases, the process is purposefully designed to discourage the provider. It is for this reason that some 50 to 65 percent of denied claims are never disputed. Bottom line and staffing costs can be exacerbated by deteriorating patient relations. When a patient is receiving bills months after service, they are likely to believe the medical practice is mishandling the billing. Ignore the issue and the same denials are likely to repeat. Staff training is a great way to begin addressing the issue of denied claims, but first, try to understand why claims are being denied to begin with.

Why Are Your Claims Denied?

Denial rates vary greatly from practice to practice and between specialties, but most claims are denied for a handful of reason:

Lack of Specificity – ICD-10 added thousands of diagnosis and procedure codes. Providers must now use the most specific code available to them for each case. Failure to so can lead to claim denial.

Late Fillings – The average medical practice has contracts with 13 payers. Each of these payers has different claim filing deadlines. If a practice files claims weekly it may miss a deadline between filings.

Information Errors – A claim denials can be prompted by a missing subscriber number, incorrect incident date and incorrect patient demographic data.

Coverage Issues – Failure to verify coverage is more common that it should be. Sometimes a patient’s insurance coverage may have changed since their last visit, or their policy may include restrictions on some services.

Reduce Claim Denials With Staff Training

According to the Advisory Board, 9 out of 10 denials are preventable. The key is to find and correct the root causes of the denials. One root cause of claim denials in almost any medical practice will be human error. A well trained staff can produce clean insurance claims that meet with minimal denials.

Clean claims start with the physician’s input. The doctor’s documentation must reflect the service provided and all of the information necessary to bill that service. Coders review the doctor’s notes and code the claim to the highest level of specificity available. The billers should transfer the data to the claim and review and analyze the claim before submitting it.

When a claim is denied, each team member also plays a specific role. Demographic errors can be corrected by the billers or front desk staff. If a medical necessity issue arises, the physician will need to get involved. Appealing a claim may not require every staff member’s input, but everyone should be aware of who will handle each denied claim most efficiently.

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