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Major Reasons For Claim Denials In The Healthcare Industry

The healthcare industry is plagued with claim denials. Many factors drive this trend, but the cause is tough to pinpoint. It may be due to provider or payer error or just simply due to the complexity of the medical billing and coding system in general. Medical coding is an integral part of the healthcare industry.

Providers must work closely with their in-house or outsourced medical coders to ensure that the patient information they provide is accurate and claims are filed on time. When an insurance claim is denied, both the cash flow and the relationship with the patient can be affected.

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When claims are appealed, they often leave the patient’s claim status up in the air due to the temporary hold on payments while awaiting a decision- which can be stressful for both you and your patient.  A health insurance denial can leave everyone in limbo. When appeals are successful, they will give you a chance to provide excellent service to your patient again.

Denial. It’s a dreaded word in the insurance world. But preventing these denials can be as easy as understanding their root causes. Insurers may offer claims management software for your practice, to help you identify and prevent appeal insurance denials before they happen. So it’s important that you’re aware of these tools and are utilizing them.

In this article, you’ll learn about the main reasons why claims are denied and how these issues arise in your healthcare facility.

1. Claims Are Not Filled On The Right Time

One of the most important parts of a healthcare practice is its ability to get reimbursed for its services. In order to do so, practitioners need to submit claims in a timely manner. If a healthcare practitioner neglects to submit a claim before its due date, this will often result in the doctor or hospital being forced to pay out-of-pocket.

Healthcare providers should be extra cautious about filing claims on time, but this is often not the case. It’s usually because of incomplete or lost charge slips, which are also known as, charge tickets or an itemized list of patient services. If they do get corrected, they can still be denied when they’re resubmitted after their filing date has passed.

2. Inaccurate Insurance ID Number On The Claim

When a healthcare provider or a medical practice encounters a new patient, they must verify the patient’s information. This means verifying any changes in insurance and contact information. However, providers should also be aware that old insurance cards and ID numbers submitted on an original claim may no longer be accepted by the insurance company or payer.

Data entry errors happen all the time when people enter information manually. Medical coding mistakes, billing errors, and more can severely impact the reputation of a healthcare facility. One way to help avoid these mistakes is by using specialized software that can automatically organize, process, and store the data for you.

3.Non-Covered Services

A hospital’s billing system may not consider a treatment medically necessary if the diagnosis submitted on the claim does not match the patient’s diagnosis. However, even though a healthcare provider may have prescribed the treatment, the patient’s actual diagnosis may not have been communicated to the staff members responsible for coding and billing. It is always difficult to prevent coding and billing errors, but it becomes even more difficult when providers don’t provide enough information about their services and linked diagnosis. Preventing billing errors due to inaccurate documentation can be a huge challenge for any medical facility.

4. Services Are Reported Separately

It is important to note that physicians may belong to a practice that is not covered by the patient’s insurance, so some procedures should not be coded or bundled together. For example, if both surgeon and anesthesiologist are performing different procedures, they should not have the same CPT code.

It is therefore essential for physicians not to group procedures when they are being performed by either a single physician or a team. Professional medical coders who are familiar with the hospital’s policies can help cut down on denied claims. A specialized billing expert will be able to reduce denials that occur due to mistakes in coding and editing by understanding the services provided for the patient and the hospital’s bundling policy.

5. Inconsistent Data

Data discrepancies often result in denied coverage for procedures. This can happen for several reasons such as an error in gender-specific conditions being documented wrong, or inaccurate data entry. When your claim system comes across an inconsistency or error, you must take the necessary precautions.

When this happens, the claim will be prevented from being processed and denied. This saves both providers and insurers time and money, which is why alert systems are recommended. Alert systems help not only the provider but also the customer. A simple error or inconsistency can be fixed with the push of a button before anything else gets messed up.

6. Pre-authorization or certification was not obtained

A lack of pre-certification can cost your practice time and money. If you are not sure about which insurers require pre-authorization, that is a problem. If a physician neglects to get pre-authorization, they can cost themselves and their patient’s money and decrease patient satisfaction. Prior authorization denials can damage a medical practice in every way.

Physicians should make sure to know which insurers need pre-authorization for what procedure and why. You want to make sure you’re using the right medical billing software; otherwise, it can hurt your business. Make sure you know what procedures require preauthorization and which ones don’t. It’s important to get pre-approval for a procedure even if it’s not done as it can be much more difficult to get retroactively approved.

7. Claim Form Errors in Coding, Diagnosis, or Data

The revenue cycle is a really important aspect of a hospital and also for its medical providers. One of the most common causes of claim rejections is simple clerical errors. For example, a patient’s name might be misspelled or some digits in their ID number may be transposed. Errors like these are easy to fix but these little errors can have repercussions on your business. They can prolong the revenue cycle, so it’s best to avoid them at all costs.

Medical billing has become quite complicated for doctors. In the new era, it’s all about prevention. Doctors need to be able to correctly diagnose and perform procedures to avoid claim denials in the future. It’s sometimes possible to successfully appeal these denials, but the easiest route is prevention. Well-trained coders and specialized medical billing software are both valuable assets that cannot be ignored and doctors need them to avoid these problems.

8. Claim Was Filed After Insurer’s Deadline

Although it can be quite hard to handle your insurance claim deadlines but it’s also important to stay on top of your deadlines. Different insurers have different policies on what happens when you miss a deadline and different deadlines in general. Usually, if you miss a deadline, it’s safest just to call the company up to talk things through.

However few insurance companies don’t operate like that and might ask you to fill out and deliver more paperwork. You can use medical billing software to notify you of claim submission deadlines and procedures to follow when you miss them. In general, it’s best to submit claims as close to the same day as possible after services are rendered so your revenue cycle doesn’t get slowed down.

9. Insufficient Medical Necessity

It is tough getting your insurance claim rejected sometimes. On multiple occasions, insurance companies won’t pay for a procedure they deem medically unnecessary. These cases are difficult for everyone involved, but there are ways to avoid these situations. In any case, where medical necessity is unclear, good communication between clinicians, billing staff, insurers, and patients is essential so that everyone has the opportunity to understand the situation and make an informed decision.

Having a claim denied because of medical necessity can be a huge headache for both you and your patient. When this happens, there are two options: either collect the balance from the patient or absorb the cost of the services. Neither of these options is good.

10. Use of Out-of-Network Provider

The network of medical providers that an insurance company can use may change from year to year and patients may not be aware of this. They also might not be aware of the fact that swapping insurers may mean switching doctors. It’s really important for them to know about the implications of this change before it happens.

Ascertaining a patient’s insurance information before their appointment is booked or during registration is an essential step for understanding what sort of benefits the patient can expect. This is also helpful to check if your practice is in the patient’s insurance network. To better serve your patients, a claims management software can help you by keeping you up-to-date and notified on which networks your practice belongs to.

GreenSense Billing To The Rescue

No one likes having to work through denied claims. It’s frustrating, it takes a lot of time, and it can be hard to get paid for the work you do. But your business doesn’t have to take those risks. Luckily, there are plenty of different ways to minimize the chance of this happening and avoid such situations.

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Make sure your medical practice has a stellar communication process with patients and with insurers, invests in training for your coding professionals and front-end staff, and employs the best medical billing processes. All these factors can greatly reduce the number of denied claims and the corresponding headaches.

Poor management of processing claims can negatively impact the revenue cycle of your healthcare facility. If your clinical practice requires medical coding and billing, GreenSense has a team of professional coders that can help you balance your books and keep your facility in good shape.

We aim at providing the billing and coding solutions to keep your medical practice in working order. Our mission at GreenSense Billing is to help streamline a positive patient medical experience by providing accurate medical coding and billing solutions. Overseeing medical coding and billing can be time-consuming, but we work closely with physicians and practice managers to ensure the most efficient and accurate services.

Choose GreenSense Billing For Denial Management

Is your healthcare practice struggling with a high volume of denials? It is recommended that you should work with an experienced global company that comprises a team of experienced medical billers and coders who can help you manage all your health insurance claim denials. Such a firm can help you to decipher the issue, identify the root causes and resolve all your problems by providing every possible solution.

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Welcome to GreenSense Billing—one of the most prolific medical billing services providers in Brainerd, Minnesota. Our team of highly-trained medical coders and billers serves clients all over the United States. We are fully focused to understand your services and solve all your billing issues; even the most nuanced and complex ones.

This makes our billing and coding procedures effective so that your practice can run smoothly. GreenSense Billing knows the ins and outs of medical coding and billing. We guarantee you that we’ve got your back, so why the wait? Partner with us today. Contact us at (218) 203-0510 to reduce claims denials and get your business on the right track.

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