Medical billing is an essential process in healthcare administration. It involves sending requests to insurance companies regarding services provided to patients. Healthcare providers strive to receive prompt payment. Denials in medical billing can create significant difficulties and hinder cash flow.
The most common denials in medical billing, such as coding errors or insufficient information, or incorrect patient information, can trigger denials. But, by implementing effective strategies, healthcare professionals can dramatically reduce the number of denials they receive by improving their billing procedures.
Different types of denials in medical billing
Denials in Medical Billing can occur when payers or insurance companies do not pay medical professionals for patient services. Claim denials have a variety of reasons, including types of denials in medical billing are:
This kind of denial happens when there are a few errors in the medical codes that indicate the services rendered to the patient. It could be caused by incorrect diagnosis codes, procedure codes, or modifiers, leading to claims being rejected by the payer.
Denials can occur when vital information is not included in the claim form, such as the demographics of the patient as well as insurance information or credentials for the provider. Incorrect or incomplete data could cause a claim to be rejected.
Insurance policies are not to be able to cover specific medical treatments, procedures, or other services. If a healthcare provider files an insurance claim for a non-covered service, the insurer will decline the claim based on the policy’s limitations.
Specific insurance plans require pre-authorization or pre-certification to access certain medical procedures or services. Failure to obtain pre-authorization can result in denial of the claim.
Submitting the same claim multiple times for the same service unintentionally may result in duplicate claim denials.
Timely Filing Limit Exceeded:
Insurance companies set specific deadlines for the submission of claims which are referred to as deadlines for filing claims. If a claim isn’t filed within the timeframe specified, the payer can reject the claim.
Coordination of Benefits (COB) Issues:
COB denials can occur when several insurance policies cover a patient, and there needs to be more coordination between primary and secondary insurers.
Billing Out of Network:
If the provider of healthcare is not in-network with the patient’s insurance policy, the claim could be denied, resulting in the patient being held accountable for the entire costs of the procedure.
Certain services need documentation to demonstrate medical necessity. The claim can be denied if medical records don’t support the need for an operation or service.
Identity and Eligibility Verification Denials in medical billing may occur when there is a discrepancy in the patient’s identity or eligibility, like insufficient or expired coverage.
Medical Billing Denial Codes and Reasons
Insurers or payers use alphanumeric codes for medical billing to provide a consistent justification for denying an application. These codes aid medical professionals and billing personnel to understand the reason behind the denial and allow them to appeal the decision appropriately.
The reasons for denial could differ based on the insurance company and the specific circumstance. however, here are a few most common medical billing denial codes and reasons, along with the reasons for them:
CO-16: Claims need more information that is required to be adjudicated.
Reason the claim is not able to provide crucial information, such as the demographics of the patient, insurance details, or provider credentials.
CO-22: Another payer may provide this coverage as part of the coordination of benefits.
Reason: The patient is covered by multiple insurance plans, and the primary payer has to coordinate benefits in conjunction with the secondary insurance.
CO-29: The time limit for filing has expired.
Reason: The claim was not filed within the time limit for filing that was set by the insurance company.
CO-45: Charges exceed your contracted/legislated fee arrangement.
Reason: The charges you are charged exceed the agreed-upon fee schedule between the insurance company and the provider.
CO-50: These are non-covered services because they are not considered to be a “medical necessity” by the insurance company.
Reason: The insurance company cannot determine if the service is medically essential based on the documentation provided.
CO-97: It included reimbursement for a procedure or service already ruled on.
Reason: The service is part of another service and cannot be separately reimbursed.
PR-1: Deductible Amount.
Reason: The amount is dependent on the patient’s deductible and the patient is required to pay the cost before the insurance coverage begins.
PR-2: Coinsurance Amount.
Reason: The claim is subject to coinsurance, and the patient is accountable for a portion of the amount allowed.
PR-3: Co-payment Amount.
Reason: The claim needs a set amount of co-payment that is the patient’s responsibility.
PR-96: Non-covered charge(s).
Reason: The procedure or service isn’t covered under the insurance plan that covers the patient.
MA130: Your claim contains incorrect or incomplete information, and there is no appeal right since the claim cannot be processed.
Reason: The claim is based on crucial errors or lacks crucial information, rendering it ineligible to process without appeal rights.
How do you make sure that you submit the Claims correctly?
Making sure that claims are submitted correctly to receive timely reimbursements and ensure a healthy revenue cycle. To ensure this, double-check and verify patients’ information, including demographics and insurance details.
Verifying insurance eligibility and coverage before providing services can prevent denials of claims and dissatisfaction of patients. Correct coding and documentation justify the medical need for the billed services and aid in explaining the insurance company’s decision to pay.
A timely submission of claims and adhering to the guidelines of payers, and using electronic submission whenever possible will speed up the process of reimbursement and reduce the risk of making errors.
Utilizing a medical billing program and keeping up-to-date on industry-wide coding guidelines and changes can improve billing accuracy and facilitate the claim submission process. With a proactive approach and care for minor details, healthcare professionals can maximize their revenue and maintain the financial stability of their practice.
Medical Billing Denial Management Process
Effective denial management is essential for healthcare providers to reduce revenue loss and ensure prompt reimbursements. Implementing a well-organized medical billing denial management process can greatly improve the effectiveness of resolving claim denials. This is a step-by-step guide for the management of medical billing denials procedure
The initial step to managing denials in medical billing is to identify denied claims. Review regularly EOBs (Explanation of Benefits) (EOBs) or electronic remittance guidance (ERA) that insurance companies send you in order to find denials. Use software for medical billing or revenue cycle management (RCM) systems to monitor and categorize denied claims.
Categorization and Analysis:
Classify denials according to the reason codes given by the insurance provider. Analyze trends in denials to identify the most common medical billing denial codes and reasons and potential areas of trouble within the billing process. Understanding the root cause of denials can help develop specific solutions.
Research and Verification:
Gather all relevant data, including medical documents, codes, and eligibility verification, to verify the claim’s validity. Verify eligibility and coverage of insurance for the date of service to ensure that the billing is accurate.
Based on the findings Based on the analysis, take corrective measures to address the root cause of denials. This could include improving the quality of documentation, improving accuracy in coding, or enhancing the medical billing denial management process.
Appeals and Resubmissions:
Prepare and submit appeal letters to denials that may be appealed. Follow the payer’s appeal procedure instructions and submit all documents to support the argument for reimbursement. If you have claims that contain mistakes or insufficient information, rectify the issue and submit the claims in a timely manner.
Communication and Follow-up:
Maintain open communication with insurance firms. Follow up on appeals and resubmissions to ensure they are processed and received. Keep an eye on the status of every denied claim, and take the appropriate actions if necessary.
Monitor and Metrics:
Monitor the process of managing denials and monitor the key performance indicators (KPIs) that are related to denials. Monitor the rate of denial and time to resolution and appeals’ success rate to assess how effective the process of managing denials is.
Use the data and feedback from the management of the denials process to determine potential areas for improvement. Make changes that streamline the billing process and decrease the chance of denials in the future.
Select HMS USA to handle Deny and Resubmit Claims.
Regarding managing denied claims and ensuring they are accurate claims resubmissions, Choose HMS USA is a dependable and experienced medical billing service. With their experience in managing claim denials, they assist healthcare professionals in navigating the complexity of billing and efficiently addressing denials.
If you select HMS USA, you gain access to a team of experts who meticulously examine denial reasons and verify the information of patients and rectify any mistakes. Their commitment to ensuring accurate claim resubmission ensures your most revenue. You can trust HMS USA to handle your rejected claims and enjoy increased reimbursement rates and better financial stability.