Many medical facilities think that the high rate of claim denial doesn’t affect their profit and only the patients have to suffer because of this but that’s not true. According to a study, it has been found that high claim denial rates are directly linked with the low revenue of medical facilities. In the year 2017, a study revealed that out of the $3 trillion claims filed by patients in the US, almost $270 billion worth of claims were rejected.
The high rates of denied claims have the biggest effect on all the small and independent healthcare providers since they are always operating on a confined budget. For many small and independent healthcare providers, errors in medical billing seems unavoidable but such type of misconception dissipates once they start using insurance claims processing services.
Medical billing deals with the two most important parts of anyone’s life- health and money and therefore, it doesn’t matter how many good doctors you have, how good are your rooms, and how well behaved your administrative staff is if you can’t reduce your claim denial rate, the footfalls in your healthcare facility will keep on increasing.
Here, we will delve deeper into the medical billing errors and claim denial realm and we will also look at what is the best method to overcome such errors.
Denied and rejected claims
The first thing you must understand is that both rejected and denied claims are not the same. A rejected claim includes a claim that is full of errors and these errors are present in the claim even before the papers are processed. Such claims are directly rejected by any insurance company and are sent back to the biller for corrections.
A rejected claim is mostly a result of clerical errors and in some cases, it is a result of a mismatch of ICD codes and procedures. A rejected claim is also returned to the biller and the biller is asked to give a brief explanation for the error. Such claims are later rectified and then submitted again.
But a denied claim includes all those claims that have been processed by the payer and yet the deemed unpayable. In most cases, such claims simply violate the terms of the payer-patient contract, or in other cases, they contain severe errors that were identified after the processing of the paperwork began.
Both the rejected and denied claims levels up the frustration of the administrative department but this can be offloaded by simply opting for insurance claims processing services.
What are the most common reasons for medical billing errors?
Lack of specific coding
The main thing that many administrators fail to understand is every diagnosis needs to have the highest level of coding for that specific code. If you have never worked with medical billing coding, then fathoming the entire scenario can take many months and when specific codes are not available for every diagnosis, errors become inevitable.
Missing information in claims
Any missing item in the papers used to file the claims can bring the claim back from the insurance company for correction since every field in the paper needs to be properly filed. Some most common parts of the claim where people make mistakes are the date of onset, date of a medical emergency, and date of the accident. It is necessary to scrutinize all the claims so that all required information is provided in the papers.
There are many medical facilities out there that never choose medical insurance billing companies and they keep on using outdated coding books. This is another big reason for denial of claims and it can cause a lot of issues. Any kind of use of outdated codebooks like ICD-9, HCPCS, or CPT can result in a loss of revenue for even the best healthcare facility provider.
Upcoding or unbundling
Upcodes happen when CPT codes are used by the healthcare provider to bill a health insurance provider for providing higher-paying services than what was actually performed. This is another common billing error that has been seen in most independent and small healthcare service providers. On the other hand, unbundling happens when healthcare provider bill everything separately and this results in a higher total than the special reimbursement rates.
What can be done to avoid billing mistakes and denied claims?
If you don’t want to lose your revenue and if you wish to win back the trust of your clients then you should start working with medical insurance billing companies. Such companies have the right professionals, people, and tools to provide 100% accurate, effective and quick medical billing service.
Also, when you choose to outsource medical billing to medical insurance billing companies, you make a move to manage the claim denial rates, and therefore, neither you nor your patients have to deal with any issue related to the claim process.
Medical billing and claim denial might be very common but this doesn’t mean they should be overlooked as it can directly impact the revenue cycle and have an adverse effect on the reputation of any healthcare provider.